FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

          [ ] 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 0-19298

                              RIDDELL SPORTS INC.
             (Exact name of registrant as specified in its charter)

             DELAWARE
   (State or other jurisdiction                          22-2890400
of incorporation or organization)           (I.R.S. Employer Identification No.)

               1450 BROADWAY, SUITE 2001, NEW YORK, NEW YORK 10018
          (Address of principal executive offices, including zip code)


       Registrant's telephone number, including area code: (212) 921-8101

           Securities registered pursuant to Section 12(b) of the Act:
       Title of each class       Name of each exchange on which registered
             [NONE]                                   [NONE]

           Securities registered pursuant to Section 12(g) of the Act:
                          COMMON STOCK, $.01 PAR VALUE
                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. YES [x] NO [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (229.405 of this chapter) is not contained  herein,  and will
not be contained,  to the best of Registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [x]

The Registrant  hereby  incorporates by reference,  in response to Part III, its
Proxy  Statement for its 2001 Annual Meeting of  Stockholders  to be filed on or
before April 30, 2001 (except to the limited extent the rules and regulations of
the  Commission  authorize  certain  sections of such Proxy  Statement not to be
incorporated  herein by  reference,  as  specifically  indicated  in such  Proxy
Statement).

The aggregate market value of the 4,794,797  shares of outstanding  voting stock
held by non-affiliates of the Registrant, computed by reference to the last sale
price of the Registrant's Common Stock on March 21, 2001, is $11,555,461.

As of March 22, 2001, the Registrant had 9,452,250 shares of Common Stock,  $.01
par value per share, outstanding.

<PAGE>


         SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

          This  report  contains   certain   forward-looking   statements,   and
information  relating to Riddell that are based on the beliefs of  management as
well as assumptions made by and information  currently  available to management.
Such forward-looking  statements are principally contained in the sections "Part
I--Item 1--Business," and "Part 2--Item 7--Management's  Discussion and Analysis
of Financial  Condition  and Results of  Operations."  Our  statements of plans,
intentions, objectives and future economic or operating performance contained in
this report are forward-looking  statements.  Forward-looking statements include
but are not limited to statements containing terms such as "believes," "does not
believe," "no reason to believe,"  "expects," "plans,"  "intends,"  "estimates,"
"will," "would,"  "anticipated" or  "anticipates."  Such statements  reflect the
current  views of  Riddell  with  respect to future  events  and are  subject to
certain  risks and  uncertainties  and that could  cause the  actual  results to
differ materially from those expressed in any forward-looking statements made by
Riddell. We do not intend to update these forward-looking statements.

                                     PART I

ITEM 1.   BUSINESS

GENERAL

     Riddell is a leading  marketer  and  manufacturer  of branded  products and
services to the extracurricular activities portion of the educational market. We
believe that the extracurricular  activities market encompasses approximately 30
million young men and women in the United States who  participate in team sports
and other  organized  activities  outside the  classroom.  We estimate that this
market exceeds $5 billion in sales annually,  including approximately $2 billion
of sales in athletic equipment and uniforms for team sports and various products
and services for cheerleaders and dancers.

     Under our many  brands,  the best known of which are  Riddell  and  Varsity
Spirit, which we own, and Umbro, which we license, we are:

     o    a leading provider of athletic equipment and clothing for team sports;

     o    the only  national  reconditioner  of  football  protective  and other
          athletic equipment;

     o    the largest designer,  marketer and supplier of innovative cheerleader
          and dance team uniforms and accessories;

     o    the biggest operator of cheerleading and dance team training camps and
          clinics;

     o    a leading organizer of special events for extracurricular activities;

     o    a major  provider of soccer  apparel,  equipment and footwear for team
          play;

     o    a supplier of sports  collectible  products  through  retailers in the
          United States and internationally; and

     o    a major provider of studio dance conventions and competitions.

     We have built our  various  brands and lines of  business,  in large  part,
based  upon our  long-standing  marketing  strategy  through  which our  direct,
proprietary   sales  force  establishes  and  builds   relationships   with  the
participants,  coaches and  instructors  among the 40,000 junior and senior high
schools,  colleges and various youth organizations throughout the United States.
We believe that our sales force is unique within the extracurricular  activities
market and provides us with a significant competitive advantage.

     We employ our relationship  marketing strategy  year-round,  integrating it
with our other  activities,  including  conducting  training camps,  clinics and
conventions   and   producing   various    nationally-televised   and   regional
championships in the U.S. and performance  events in the U.S. and Europe.  These
activities,  which are in themselves  profitable,  reinforce  each other and the
sale of our products,  while they enhance  participation in the  extracurricular
market and build loyalty to our brands.

     We believe  that more than 50% of all high school and  collegiate  football
players either wear our football helmets or use other branded football equipment
sold by us. We also have a longstanding agreement with the NFL for

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the promotion of our Riddell  brand.  Over 80% of the NFL players choose to wear
our helmets.  We also use the Riddell brand to sell sports collectible  products
through retailers in the U.S. and  internationally.  We believe that our Varsity
Spirit  brand  cheerleading  uniforms  are worn by more high  school and college
cheerleaders than any other brand. Our cheerleading  camps were attended by more
than  230,000  students in 2000,  more than 30,000  people  traveled to the Walt
Disney  Resort  in  Orlando,  Florida  to  participate  in and view our  various
cheerleading and dance competitions.

     We are a  Delaware  corporation  that was  formed  in 1988 to  acquire  the
Riddell brand football protective  equipment  business.  In 1991, we effected an
initial  public  offering  of  our  common  stock.  Since  1995,  we  have  been
distributing our products to the  extracurricular  market directly,  rather than
through dealers.  In 1997, we acquired Varsity Spirit  Corporation,  a leader in
the spirit industry.  At the end of 1998, we became the exclusive U.S.  licensee
for Umbro branded soccer team apparel,  footwear,  equipment and accessories for
the team  channel of  distribution.  Umbro is one of the leading  soccer  brands
worldwide.  We believe that the Umbro license  complements our existing  product
lines.

     Our  strategy  is to  increase  our  current  market  share and broaden the
recognition of our brands in the extracurricular  market. We intend to implement
this strategy by:

     o    continuing to focus on opportunities to market additional products and
          services to our  traditional  customers  in our team sports and school
          spirit business;

     o    developing  special events,  competitions and  championships to create
          new relationships with participants in extracurricular activities that
          we are currently not serving effectively, such as youth baseball; and

     o    expanding the size of our sales force.

RECENT DEVELOPMENTS

     On March 1, 2001, our subsidiary, Varsity Fashions and Supplies, Inc. filed
a lawsuit in the Southern District of New York against Umbro Worldwide, Ltd. and
its  related  companies  seeking to  prevent  certain  breaches  by Umbro of its
agreement with Varsity  pertaining to, INTER ALIA, its sale of products into the
United States via the Internet and its threatened  change of market  positioning
of certain Umbro  products  previously  sold by Signal  Apparel,  Inc. We do not
believe the lawsuit will have a material adverse effect on the company.

BUSINESS SEGMENTS

     We  presently  employ our sales and  marketing  strategy  and  operate  our
business through various wholly-owned subsidiaries in three business segments.

     EXTRACURRICULAR

     Our extracurricular  segment, which we have historically referred to as our
institutional  segment,  markets,  manufactures  and  distributes  products  and
services  primarily  through our  approximately 340 person direct sales force to
customers such as schools,  recreational groups and other  organizations.  It is
our largest segment, and was responsible for over 91% of our revenues in 2000.

     RETAIL

     Our retail  segment  markets  products  through  retailers  in the U.S. and
internationally,  and was  responsible for  approximately  8% of our revenues in
2000. Most of the products sold by this segment are sports collectible products,
such as authentic and replica  football  helmets  which bear  licensed  National
Football  League and  collegiate  team logos.  We also have a license from Major
League  Baseball.  This  segment's  operations  also include  sales of a limited
amount of  recreational  football,  baseball and other  athletic  products  sold
internationally   and  in  the  U.S.  through  consumer  product  retailers  and
distributors.

     LICENSING

     Our  licensing  segment  consists  of  the  licensing  of our  Riddell  and
MacGregor  trademark rights to other entities for use in marketing products such
as athletic footwear and equipment,  and was responsible for approximately 1% of
our revenues in 2000.

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     Financial  information for each of our three business segments is presented
in Note 14 to our consolidated financial statements.

     EXTRACURRICULAR SEGMENT

     We  believe  that we are a leading  marketer  and  manufacturer  of branded
products and  services to the  extracurricular  portion of the U.S.  educational
market.  Today, our  extracurricular  products and services segment includes our
team sports and school spirit business units.

     The  extracurricular  activities  market  includes  most  of the  organized
activities  for children  that take place  outside of  classrooms  in the United
States. It includes team sports, school spirit activities, private dance groups,
bands,  orchestras,  choirs and a wide variety of other school-sponsored  clubs,
such as drama, debate and chess and is serviced by a highly-fragmented  range of
suppliers.

     These activities take place in approximately  40,000 junior and senior high
schools and in  colleges,  as well as in youth  leagues and  organizations  like
Little League, Pop Warner and parks and recreation  leagues.  In addition to the
6.5 million  participants  in high  school team sports in the U.S.,  we estimate
that there are an  additional  20 million  participants  in team sports in youth
leagues and junior high  schools.  We also estimate that there are an additional
10  million   participants  in  other   extracurricular   activities,   such  as
school-sponsored cheerleading, bands and choirs and youth who take dance lessons
at private studios.  We estimate that spending by these various  participants on
the extracurricular  activities that we are already targeting exceeds $2 billion
a year and represents aggregate spending of over $5 billion annually.

     TEAM SPORTS

     We are one of the world's leading manufacturers of football helmets,  which
we sell under our Riddell brand.  Our Riddell brand football helmets are worn by
football  players  throughout  the  world,  including  players on all NFL teams,
certain other  professional  leagues and on most teams in the NCAA.  High school
teams,  however,  have  historically  been the largest  market for our  football
helmets.  We offer several types of competitive and youth football helmets which
are different in their configurations,  padding and other features.  Our helmets
meet the industry standards set by the National Operational Committee for Safety
in Athletic Equipment,  an independent entity organized by various  participants
from the sporting goods industry which establishes  industry-wide  standards for
protective athletic equipment.

     We also sell a professional  and collegiate line of shoulder pads under the
Power(R)  name and several  other lines of shoulder pads under the Riddell name.
Our shoulder pads are used by NFL, college, high school and youth players.

     We have been steadily  widening the categories of athletic products we sell
to the  extracurricular  market.  In 1996,  we introduced a line of baseball and
softball products designed for high school and college players and expanded this
line to the youth  market in 1998.  In late 1998,  we also  introduced a line of
custom team uniforms for high school and youth participants.

     GAME UNIFORMS

     We believe that the game uniform  market for team sports is a larger market
than our other team sports products and services lines of business.

     In 1998, we introduced a line of athletic game uniforms for the team sports
market.  We are seeking to capitalize on the efficiency  and expertise  obtained
through the manufacture of our custom-made  cheerleading and dance team uniforms
by applying the same design and  manufacturing  techniques to the  production of
athletic game uniforms.

     At the end of 1998,  we also began  offering  Umbro team  soccer  uniforms,
equipment and apparel,  through a network of independent sales  representatives.
These  independent  sales  representatives  market and sell  Umbro  team  soccer
apparel,  footwear  and  equipment to the team  channel of  distribution  in the
United States.

     RECONDITIONING

     We are the leading  national  reconditioner of football  helmets,  shoulder
pads and athletic  equipment.  We believe  that our share of the  reconditioning
market exceeds 50%. Reconditioning typically involves the cleaning,  sanitizing,
buffing or painting,  and recertifying of helmets as conforming to the standards
set by the  National


                                       3
<PAGE>


Operational Committee for Safety in Athletic Equipment.  Reconditioning may also
include  replacing  face  guards,   interior  pads  and  chin  straps.  We  also
recondition  shoulder  pads, as well as equipment  for other  sports,  including
baseball  and  lacrosse  helmets,  catchers'  masks  and  baseball  gloves.  Our
reconditioning  services  are  marketed by our sales force to the same  athletic
coaches responsible for equipment  purchases.  Our reconditioning  customers are
primarily high schools, colleges and youth recreational groups.

     SCHOOL SPIRIT

     CHEERLEADER AND DANCE TEAM UNIFORMS AND ACCESSORIES

     We design,  market and manufacture  cheerleader and dance team uniforms and
accessories,  including sweaters,  sweatshirts,  jumpers, vests, skirts, warm-up
suits, t-shirts, shorts, pompons, socks, jackets, pins and gloves. We market all
of our cheerleading uniforms and accessories under the Varsity Spirit trademark.
Approximately  100,000 catalogs are mailed annually to schools and school spirit
advisors  and coaches  containing  color  photographs  and  descriptions  of our
Varsity Spirit line of uniforms and accessories.  We supplement our direct sales
force and catalog sales efforts with a telemarketing  sales force of 13 full and
part-time employees.

     CHEERLEADER AND DANCE TEAM CAMPS

     We operate  cheerleader  and dance team  camps in the United  States.  Camp
enrollment has increased every year since the camp division commenced  operation
in 1975 with 20 cheerleading camps and 4,000 participants.  During the 2001 camp
season,  approximately  230,000  participants,  consisting of students and their
coaches,  attended Varsity's Universal Cheerleader Association and United Spirit
Association camps,  including over 8,000 participants  representing colleges and
junior  colleges.  During  2000,  cheerleading  and/or  dance team  squads  from
approximately  75% of the universities  comprising the ATLANTIC COAST, BIG EAST,
BIG TEN, BIG TWELVE, PACIFIC 10 and SOUTHEASTERN collegiate athletic conferences
attended our camps.

     A  significant  majority  of our  cheerleader  and  dance  team  camps  are
conducted on college or junior college  campuses.  We contract with the colleges
and universities for the provision of housing, food and athletic facilities. Our
camps  generally  are  conducted  over a  four-day  period and are  attended  by
resident and commuting students.

     Our  instructors  are mostly college  cheerleaders  who may have previously
attended  our camp,  and we believe that our training of many of the top college
cheerleading  squads  augments  our  recruiting  of high  school and junior high
school camp  participants.  Prior to the commencement of our camps,  instructors
participate in an intensive  six-day  training session where they are taught new
cheerleading  and dance  material.  We also place a high  degree of  emphasis on
teaching  our  instructors  the most  up-to-date  teaching,  training and safety
techniques.

     We were a  founding  member  of and  remain an  active  participant  in the
American  Association of  Cheerleading  Coaches and Advisors,  an industry trade
group whose  mission is to improve the quality of  cheerleading  and to maintain
established  safety  standards.  In 1990,  this industry  trade group  published
comprehensive  certification and safety guidelines for cheerleading  coaches. We
follow the safety  guidelines  established by the  Association  of  Cheerleading
Coaches and  Advisors  in the  training  of our  instructional  staff and in the
conduct of our cheerleader and dance team camps and competitions.

     SPECIAL EVENTS

     We promote our Varsity Spirit brand  products and services,  as well as the
school  spirit  industry,  through  active  and  visible  association  with  the
following annual championships and television specials:

     o    National High School Cheerleading Championship(R)

     o    National Dance Team Championship(R)

     o    College Cheerleading and Dance Team National Championship(R)

     o    National All Star Cheerleading Championship(R)

     o    Company Dance Championship(R)

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<PAGE>


     These championships and special events have been regularly televised on the
ESPN  television  network  and have been  sponsored  by  various  companies  and
products,  including Nike,  Degree,  AT&T, Pond's, The Walt Disney World Resort,
Johnson & Johnson and Claire's Accessories.

     In addition to  promoting  cheerleading  and dance team  activities,  these
championships,  television  specials and events are a source of revenues for us.
In 2000,  over  33,000  persons,  including  cheerleaders  and  their  families,
attended our special events.

     OTHER EXTRACURRICULAR OPERATIONS

     We are continuing to expand our uniform design,  manufacturing  and special
event expertise from  cheerleading  into the private dance studio market through
our venture  called  Company  Dance.  In June 2000,  we acquired  certain of the
assets  of the  Netherland  Corporation  ("Starlight  Productions"),  one of the
larger  studio  dance  competition   companies.   While  Starlight  Productions'
historical operations and assets are not material in comparison to our Financial
Statements,  we feel that this  acquisition  combined with our existing  Company
Dance  convention  business  will help us to expand our  entree  into the studio
dance   business.   Company  Dance  operates   weekend  dance   conventions  and
competitions in twenty-nine U.S. cities, an annual convention  championship from
the Walt  Disney  Resort in  Orlando  that is  televised  on ESPN and two annual
competition championships.

     We also operate Intropa,  a tour company,  which  specializes in organizing
trips for cheerleaders,  bands, choirs and orchestras,  dance and theater groups
and other school affiliated or performing groups,  which tour in the continental
United States, Hawaii, Canada, Europe and Israel.

     RELATIONSHIP MARKETING

     Our marketing model is based upon our longstanding relationships with three
distinct but equally  important  groups.  First, our direct sales  organization,
through   personalized   service,   creates  an  important   connection  to  the
participants,  coaches and  instructors  of various team sports,  school  spirit
activities and other  extracurricular  activities in schools,  youth leagues and
organizations and colleges.  Second, instructors and staff at our camps, clinics
and performance  tours and events motivate  participants to get more instruction
and become  better  competitors.  Third,  we increase  our brand  awareness  and
enhance our  relationships  with our  customers  through our  affiliations  with
strategic  partners  such as the Walt Disney  Company,  ESPN and other media and
marketing entities.  These strategic  relationships and the televised shows that
we  produce  reinforce  the  importance  of our  events  and  competitions.  Our
extracurricular  segment is  supported  and based  upon our sales and  marketing
strategy,  which  we  believe  provides  us with a  competitive  advantage,  and
features the following key components.

     o    Our proprietary, direct sales force

     o    Cross marketing of products and promotional activities

          o    Camps and Clinics

          o    Special events, conventions and competitions

          o    Uniforms and accessories

     o    Key marketing alliances

     o    Internet operations

     PROPRIETARY, DIRECT SALES FORCE

     Our  comprehensive  relationship  marketing  and  sales  strategy  is  made
possible by our  approximately 340 person direct sales force who are responsible
for developing and maintaining  relationships among the 40,000 junior and senior
high  schools,  and colleges in the United  States.  We believe that there is no
other  nationwide  direct sales force focusing on the product lines that we sell
to the extracurricular branch of the educational market and that this gives us a
significant  competitive advantage.  Our sales force develops relationships with
coaches and athletic  directors  throughout  the U.S. by  providing  value-added
services  that  enhance the  coach's  management  of his team.  Examples of this
include:  providing clinics, fitting football helmets and equipment, and quickly
servicing,   designing  and  fitting   custom-uniforms   for   participants   in
cheerleading and team sports.

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     Over the last several years,  we have been increasing the size of our sales
force,  and intend to continue to do so over the next few years.  Increasing the
size of the sales force goes  hand-in-hand  with expanding the array of products
and services marketed by the sales force. In this way, we can shrink the size of
sales  territories,  while sales people become more efficient and increase their
incomes.  As a result,  we are seeking to make it easier for each salesperson to
better  concentrate on and become more intimate with a smaller sales  territory,
while at the  same  time  having  more  products  and  services  to offer to the
customers in that territory. The desired effect is to enable each salesperson to
generate  increased  sales by spending  less time  traveling  and more time with
customers  selling a greater  array of products and  services.  Increased  sales
enables the sales force to increase their incomes, because their compensation is
commission-based and smaller territories can also increase their incomes because
our salespeople pay for all of their travel and other related expenses.

     CROSS MARKETING AND PROMOTIONAL ACTIVITIES

     Since 1974, we have conducted, and we continue to refine, profit generating
activities,  which are an integral part of our  promotional  efforts.  We create
relationships  through our camps and events and believe that these relationships
naturally  translate to a sales  opportunity  for our  cheerleading  uniforms or
dance costumes when the campers return to school. When the sales force interacts
with cheerleaders or dance team participants and their coaches during the design
and fitting of custom  uniforms,  they also have the  opportunity  to  reinforce
participation in our camps and special events. We intend to extend this strategy
to other extracurricular  activities. The marketing of our various activities is
designed to provide logical  extensions to basic  participation and to encourage
participants,  as they improve, to increasingly utilize more of our products and
services.  All of our  marketing  activities  are  designed  so that each of our
various  products and services  reinforce  one  another,  as well as  strengthen
overall brand awareness and loyalty.

     How we  cross-market  is evident from our  marketing of special  events and
competitions  for  cheerleaders.  For example,  in order to  participate  in the
various special events that we offer,  such as the  nationally-televised  Macy's
Thanksgiving Day parade in New York City, a cheerleader must attend and excel at
one of our camps.  Our camps are the only place  that a  cheerleader  can get an
invitation  to appear in one of our  special  events.  Similarly,  we hold local
cheerleading  competitions  that progress to various  regional levels during the
course  of the  fall,  which  are the  only  way for a team to  qualify  for our
championships  which are held at the Walt Disney Resort in Orlando,  Florida and
nationally-televised on ESPN.

     Camps & Events

     Our approach to relationship  building has inter-related parts. In the case
of  cheerleading  it is our camps which,  more than anything  else,  build brand
loyalty.  Special events,  conventions and competitions enhance our relationship
marketing.

     Just as our camps  build  loyalty  with  respect to  cheerleading,  special
events,  conventions and competitions,  for other extracurricular activities can
build  new   allegiances   from   participants   in  a  wide  variety  of  other
extracurricular  activities. We run regional and national cheerleading and dance
team  competitions,  organize national dance  competitions for young individuals
and sponsor youth soccer tournaments.  The national  competitions and finals for
these  activities  are  typically  held at The Walt  Disney  Resort in  Orlando,
Florida and are  televised  on ESPN  and/or  ESPN2.  Participants  in the school
spirit  activities that we target are also given the opportunity to take part in
various performance events in the U.S. and Europe. These events include parades,
such as the annual Macy's  Thanksgiving Day parade in New York City and year-end
parades  in London  and  Paris.  We also  arrange  half-time  shows for  college
football bowl games. We intend to extend our promotional activities to a greater
number of extracurricular  activities with soccer and dance the most likely next
additions.

     Uniforms and accessories

     The  cheerleaders  who participate in our special events,  such as parades,
often come from a variety of  schools.  They each need a uniform for the special
event so that they can  portray a unified  appearance.  We design  and sell such
uniforms and also sell a travel package,  including hotel  arrangements,  to the
participants in our special events.

     At  the  same  time,  because  participation  in  our  various  promotional
activities  enhances our bond with  cheerleaders,  we believe that their team is
more likely to buy our uniforms and accessories.

     Key marketing alliances

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     We have a promotional  rights  agreement with the NFL's licensing  division
which requires that our Riddell brand name appear on the front or back of all of
our helmets used in NFL play.  Our agreement  with the NFL requires all teams in
the NFL to cover any indicia of brand  identification of any other manufacturers
that  might  otherwise  appear  on  helmets,  face  masks  or  chin  straps  not
manufactured  by us, but used during league play. In return,  we agree to supply
specified  quantities of Riddell helmets,  shoulder pads and related  equipment,
either at no cost or at  reduced  cost to each NFL team  which  has a  requisite
percentage of its roster using the Riddell  helmet.  Presently,  over 80% of NFL
players  choose to wear our Riddell brand football  helmets.  The NFL agreement,
which  dates  back  to  1989,  has  a  term  expiring  in  April  2004,  but  is
automatically  extended  for  successive  five-year  periods  provided  that the
quality of Riddell's helmets remain comparable to the best available  technology
as reasonably determined by the NFL.

     We also have longstanding marketing alliances with other strategic partners
such as the Walt Disney Company, ESPN and other media and marketing entities. We
are currently in our 19th year of broadcasting  championship  events on ESPN and
ESPN2,  and our current  agreement  with ESPN extends  through the year 2001. We
have been holding championship events at the Walt Disney World Resort in Orlando
Florida  since 1995,  and our  current  agreement  with the Walt Disney  Company
extends through the year 2004. All of these alliances serve to further emphasize
the prominence and importance of the activity and the participant.  All of these
marketing  relationships  also  enhance one another and serve to  reinforce  and
cross-market our products and services.

     INTERNET OPERATIONS

     We believe that our Internet operations, which are described further below,
are a logical  extension  and  application  of this approach and are designed to
enhance our contact with customers and build brand loyalty.

     PRODUCTION

     TEAM SPORTS PRODUCTS

     We design,  manufacture  and  package  all of our full sized  football  and
baseball  batting  helmets  at our plant in  Chicago,  Illinois.  Our Elk Grove,
Illinois  warehouse facility has a screen printing operation which can customize
practicewear  and  uniforms  with almost any logo,  team name or other design or
numbering that a customer requests.

     Power shoulder pads are  manufactured  for us by a single source in Canada,
Vortex Sales and Marketing,  Inc., and we have a facility in  Pennsylvania  that
can  customize  these  shoulder  pads.  As is the case with all of our  material
suppliers,  however,  we do not have a long term  agreement  with Vortex for our
shoulder pads. All of our other shoulder pads are imported as finished  products
from sources in the Far East.

     We purchase our baseball  products,  other than baseball  batting  helmets,
from  suppliers  in the Far East and we source our  practicewear  from  domestic
suppliers.  Athletic  uniforms  are  purchased  on a  made-to-order  basis  from
domestic suppliers.

     All of our manufactured  protective products are subjected to at least four
separate quality control procedures. Quality control inspections for helmets are
conducted when the product is molded, when liners are inserted, when face guards
are  attached  and when the  product  is  finished,  and  samples  of all models
produced are tested in accordance with National Operational Committee for Safety
in  Athletic  Equipment  standards.  We  continually  monitor our  products  for
quality.

     All adult  competitive  protective  football helmet shells are covered by a
five-year  warranty and youth football helmet shells are covered by a three-year
warranty.  Helmet liners,  protective padding and shoulder pads are covered by a
one-year warranty.

     Principal raw materials  purchased by us for use in our protective products
include various custom and standard  grades of resins,  plastic and foam as well
as metal  fasteners,  paints and cardboard.  Similar  materials are used in most
purchased  components  and  finished  products  along  with  steel  wire used in
purchased  face  guard   components  and  textile  products  used  in  purchased
practicewear  and athletic  uniforms.  We purchase  resin,  which is an integral
component in the  manufacture  of helmets,  for our  competitive  helmets from a
single supplier, a division of the General Electric Company,  although we do not
have a long term  agreement with General  Electric.  We believe,  however,  that
alternative sources of supply could be arranged without any material harm to our
business.

     We employ an  engineering  staff  principally  with  respect to the design,
development  and improvement of our helmets and shoulder pads and to the testing
of raw  materials  which are used in our products or in the  development  of

                                       7
<PAGE>


new products. We have eight employees mainly devoted to design,  development and
quality and have several  patents and patents pending that are applicable to our
protective products.

     RECONDITIONING

     Our  reconditioning  services include the sanitizing,  buffing or painting,
replacing certain parts and recertifying of athletic  equipment as conforming to
National Operational Committee for Safety in Athletic Equipment standards. These
services  are  performed  at our  reconditioning  facilities  which are  located
throughout the United States.

     CHEERLEADING AND DANCE TEAM UNIFORMS AND ACCESSORIES

     Most of the cheerleading and dance team uniforms designed, manufactured and
marketed by us are made to order.  During 2000, we contracted for our production
requirements   with  eleven   independent   U.S.  garment   manufacturers.   The
manufacturers provide knitting,  cutting, sewing, finishing and shipping, and we
provide the patterns, fabrics, yarn and manufacturing specifications and quality
control supervision. We also provide some cutting, knitting and lettering at two
specialized  production  facilities.   The  use  of  independent   manufacturing
facilities to fulfill our  production  needs affords us with the  flexibility to
adjust our production  output to meet our highly seasonal selling cycle. The use
of independent  manufacturers  also reduces our fixed costs, which we believe is
beneficial in a highly seasonal business.

     Cheerleading  accessories such as shoes, pompons and campwear are purchased
from various suppliers including Nike, Adidas,  Converse, Body Wrappers, and Top
Sox,  among others.  We have expanded the variety and number of  accessories  we
market, which has contributed to the increase in our revenues in recent years.

     RETAIL SEGMENT

     Our retail segment markets our Riddell branded products  through  retailers
and distributors in the United States,  and to a lesser extent  internationally.
Although we sell some recreational football and baseball equipment,  most of the
products  sold by our  retail  segment  are sports  collectibles.  In the fourth
quarter of 1999, we launched a web site for our collectibles, WWW.RIDDELL.COM.

     Our sports collectibles are sold under licenses from NFL Properties,  which
has granted us a license to use the names, symbols,  emblems, designs and colors
of the  member  clubs  of the NFL and the  "League  Marks"  (such  as  "National
Football  League,  " "NFL",  "AFC",  "Super  Bowl," "Pro Bowl," the "NFL Shield"
design and other insignia  adopted by the NFL) on authentic and replica football
helmets sold for display purposes to fans and collectors.  We also have licenses
from most major colleges and Major League Baseball.

     We sell football  helmets in various  miniature and full-sized  models.  We
also sell  lamps and desk  organizers  bearing  the  colors and logos of NFL and
college  football teams. We sell miniature  baseball  batter's helmets and lamps
under licenses from Major League Baseball.

     MARKETING SALES AND PROMOTION

     The  products  in our  retail  segment  are  primarily  sold to retail  and
specialty   sporting   goods  stores  and   distributors   through   independent
commissioned  sales  representatives.  We use different price points and product
types to strategically target different channels of retail trade.

     In support of our sports  collectible  products,  we have initiated various
advertising  and  public  relations   efforts.   Advertisements  are  placed  in
publications  targeted toward the sports  collectible  industry as well as other
licensed  products  retailers.  We also provide  incentives to retail outlets to
advertise  and  display  Riddell   products  during   promotional   periods  and
participate  in a major  national  sporting  goods  show  where we  promote  our
products.

     The retail  segment also benefits from the  promotional  exposure under the
NFL Agreement described above within the extracurricular segment.

     PRODUCTION

     We engineer,  manufacture and package our full size collectible  helmets at
our  plant in  Chicago,  Illinois  in a  process  similar  to that  used for our
competitive  helmets.  We purchase our miniature  helmets and other  collectible
products principally from two sources in China.

                                       8
<PAGE>


     We have  retained a design  company to assist us in  developing  new retail
collectible  products on terms that we believe are customary in the industry and
from time to time we work with other design companies.

     Athletic  products sold as part of the retail segment are  manufactured  or
purchased,  together  with similar  products  sold  through our  extracurricular
segment.

     LICENSING SEGMENT

     We license our Riddell and MacGregor trademarks to third parties for use on
various products, including clothing, footwear and balls.

     We are continually  exploring  additional  opportunities  for licensing the
MacGregor  and Riddell  trademarks  and retain the  services  of an  independent
licensing agent to assist our worldwide efforts in this regard.

     The licensing  segment also benefits from the  promotional  exposure of our
agreement  with the NFL because it gives our Riddell brand  national  television
exposure on a weekly basis during the football season.

     RIDDELL LICENSING

     We license  the Riddell  trademark  to third  parties for certain  types of
casual clothing, socks and athletic footwear.

     We license the  "Riddell"  name for use on  footwear.  Under the terms of a
settlement  agreement reached in 1997 with the bankruptcy  trustee for MacGregor
Sporting Goods,  Inc., and others,  we have ceded all of the royalties from this
license until the earlier of the second half of 2007 or such time as the license
produces $3.0 million (plus interest) of royalties to certain third parties.

     MACGREGOR LICENSING

     We have  granted  Kmart  Corporation  a  non-exclusive  license  to use the
MacGregor trademark on athletic socks until June 30, 2001. Kmart does not intend
to renew the  license and we plan to  re-license  the  trademarks.  We have also
granted Footstar,  Inc. an exclusive  license to use the MacGregor  trademark on
athletic  footwear  sold at Kmart  stores  under a license  with an initial term
expiring on June 30, 2001.  We have agreed with  Footstar,  in  principle,  to a
renewal and an  amendment  to the license,  and the  documentation  is currently
being completed.

     In 2000,  we granted a license for use of our  MacGregor  trademark on team
sports products sold to retailers. We also amended an existing MacGregor license
for team sports sold to the extracurricular segment which had been royalty free,
to provide for royalties to be paid to us.

OUR INTERNET OPERATIONS

     We believe that we can take advantage of commercial  opportunities  offered
by   electronic   community-building   and   commerce   as  it  relates  to  the
extracurricular  activities  market  because  we  have  the  largest  nationwide
proprietary sales force in the U.S. in the extracurricular activities market. We
believe   that  our   Internet   strategy  of  building   community   sites  and
simultaneously   establishing   complementary   commerce  sites  affords  us  an
opportunity to extend our  relationship  sales and marketing  strategy to expand
our core business and to develop new lines of business.

     We launched  our Internet  business in the fourth  quarter of 1999 with our
first  two web  sites:  a  community  web  site  with  e-commerce  elements  for
cheerleaders,  WWW.VARSITY.COM,  and our  e-commerce  web  site  for our  sports
collectibles,  WWW.RIDDELL.COM.  In  the  third  quarter  of  2000  we  launched
WWW.CODANCE.COM, our website for Company Dance.

SEASONALITY AND BACKLOG

     Our operations are highly  seasonal.  In recent years,  our operations have
been most  profitable in the second and third  quarters,  with the third quarter
typically the strongest,  while losses have typically been incurred in the first
and fourth quarters.

     The following  table sets forth  selected  unaudited  operating  results of
Riddell  for each of the four  quarters  in 2000 and 1999.  You should read this
information  together  with the  consolidated  financial  statements,  the notes
related to those  financial  statements  and the other  financial  data included
elsewhere in this report.

                                       9
<PAGE>


                                         First      Second    Third    Fourth
                                        Quarter    Quarter   Quarter   Quarter
                                        -------    -------   -------   -------
                                                    (in thousands)
Year ended December 31, 2000:
Revenues .............................  $39,280    $75,019   $88,180   $32,242
   Percent of total annual revenues ..       17%        32%       37%       14%
Operating income (loss) ..............  $(2,722)   $10,652   $14,373   $(5,290)
Net income (loss) ....................  $(6,719)   $ 6,441   $10,092   $(9,253)

Year ended December 31, 1999:
Revenues .............................  $34,259    $65,526   $79,965   $28,847
   Percent of total annual revenues ..       16%        32%       38%       14%
Operating income (loss) ..............  $(2,709)   $ 9,464   $14,002   $(5,072)
Net income (loss) ....................   (6,367)     5,367     9,174    (8,783)

     Net income for the third  quarter of 1999  included  income tax  expense of
$905,000 relating to the valuation of deferred taxes.

     This seasonal pattern is influenced by the following factors:

     o    Orders  and  shipments  for  our  extracurricular  segment's  athletic
          products and reconditioning  services are solicited over a sales cycle
          that  begins  late in the fall of each year and  continues  until just
          before  the  start of a new  school  year at the end of the  following
          summer.   Delivery  of  products  and  performance  of  reconditioning
          services  reach a low  point in the  fall of each  year  after  school
          begins  and during  the  football  playing  season.  These  activities
          contribute most to  profitability  in the first through third quarters
          of each calendar year.

     o    Cheerleading and dance uniforms and accessories are typically  ordered
          and shipped between late March, when new cheerleaders are selected for
          the coming  school  year,  and the end of August,  just before the new
          school year begins.

     o    Most of the  extracurricular  segment's  camp  revenues  relate to our
          cheerleading  camps.  We incur  costs  relating  to our camp  business
          during the first and second  quarter  as we prepare  for the  upcoming
          camp season, while most revenue relating to the camps is earned during
          the  period  from  June to  August.  Company  Dance  competitions  and
          conventions  primarily take place during the first and second quarters
          which may temper this segment's seasonality.

     o    Our retail segment's sports collectible products are sold to retailers
          throughout  the year.  However,  sales are  usually  at their  highest
          during the third and fourth  quarters as retailers  build inventory in
          anticipation of both the football and the holiday shopping seasons.

     o    The  sale of  Umbro  branded  items  is also  seasonal,  substantially
          following  the  pattern  of  our  existing   extracurricular  athletic
          products as soccer, like football,  is primarily a fall sport. Soccer,
          however experiences a spring season as well, which may somewhat temper
          the seasonality of the sale of Umbro branded products.

     Our sales order  backlog was $20.7 million at February 28, 2001 compared to
$20.6 million at February 29, 2000. We expect  substantially  all of the backlog
to be shipped within the 2001 calendar year.

COMPETITION

     ATHLETIC PRODUCTS

     Our  principal   competitor  in  the  football  helmet  market  is  Schutt,
manufacturer  of the AIR helmet.  Also,  Bike  Athletic  Co.,  Inc. has recently
introduced a football  helmet.  We compete  principally  with Bike Athletic Co.,
Inc., Douglas,  Inc., Gear 2000, Inc. and Rawlings Sporting Goods Company,  Inc.
in the  football  shoulder pad  business.  We compete  principally  with Diamond
Sports Co., Rawlings Sporting Goods Company, Inc., Wilson Sporting Goods Company
and other  companies  in baseball and  softball  products.  We also compete with
Champion  Products,  Inc.,  Russell  Athletic,  Inc.,  and other  companies  for
practicewear  and athletic game uniforms.  We  principally  compete with Adidas,
Nike, and other  companies for soccer team apparel,  footwear and equipment.  We
also compete with numerous  independent dealers throughout the United States who
market our  competitors'  products.  Some of our competitors  are  substantially
larger and have greater resources than us.

                                       10
<PAGE>


     We believe that we compete in the football  market on the basis of quality,
price,  reliability,  service, comfort and ease of maintenance.  With respect to
football  and other  athletic  products,  we believe that our direct sales force
provides  us with a  competitive  advantage  in terms of our  ability to provide
superior customer service and that our  factory-direct  pricing is a significant
price advantage due to the elimination of independent  dealers which are used by
our competitors.

     RECONDITIONING

     Reconditioners  compete  on  the  basis  of  quality,  price,   reputation,
convenience and customer loyalty.  We believe that we are the largest nationwide
participant  among the  approximately  30 competitors  in the highly  fragmented
athletic reconditioning industry.

     SPIRIT PRODUCTS AND SERVICES

     We are one of two major companies that design and market cheerleader, dance
team and booster club uniforms and accessories on a national  basis.  Besides us
and our major national  competitor,  National Spirit Group, there are many other
smaller regional  competitors  serving the uniform and accessories market in the
United States.  We believe that the principal factors governing the selection of
cheerleader and dance team uniforms and  accessories  are the quality,  variety,
design, delivery, service and, to a lesser extent, price.

     We are also one of two companies that annually operate a significant number
of cheerleader and dance team camps in the United States,  again the other being
National Spirit Group.  There are also many other smaller  companies and schools
that operate cheerleading camps and clinics on a regional basis. We believe that
the principal  factors  governing  the selection of a cheerleader  or dance team
camp or clinic are the  reputation of the camp  operator for  providing  quality
instruction and supervision, location, schedule and the tuition charged for camp
participation.

     We compete with  Showbiz,  Starpower,  Showstoppers,  Tremaine,  West Coast
Dance  Explosion,  New York City Dance Alliance,  and other smaller national and
regional  companies in operating studio dance conventions and  competitions.  We
believe  the  principal  factors  governing  the  selection  of a  studio  dance
convention or competition are the reputation of the dance operator for providing
quality instruction and supervision,  location, schedule and tuition charged for
convention/competition.

     RETAIL COLLECTIBLE PRODUCTS

     Our  collectible  products  compete  with a large  number and wide array of
manufacturers  and  sellers  of sports  and other  collectible  and  memorabilia
products, some of which have greater resources than us. Among our competitors in
this large  marketplace are sellers of products such as autographed  photographs
and uniforms and other memorabilia and  manufacturers of clothing,  such as caps
and jackets.

     LICENSING

     Competition in the licensing of sports  equipment,  apparel and footwear is
substantial,  and  the  Riddell  and  MacGregor  brands  compete  with  numerous
companies also having significant brand recognition,  many of which have greater
financial,  distribution,  marketing and other resources.  Brand recognition and
reputation  for quality are  important  competitive  factors in the licensing of
sports apparel and footwear.  Competing brands include  Adidas(R),  Champion(R),
Converse(R), Nike(R), Rawlings(R), Reebok(R), Russell(R) and Wilson(R).

PATENTS AND TRADE SECRETS

     Some of our football  helmet liner systems and other items are protected by
patents and trade secrets,  including a patent on our inflatable  liner expiring
in 2010.  Other  patents on the liners will expire in 2008. We also have patents
expiring in 2006, 2007 and 2008 on various components of our shoulder pads which
improve absorption of shock.

TRADEMARKS AND SERVICE MARKS

     We own various common law and registered trademarks in the U.S. and various
foreign countries including the following:  Riddell, MacGregor,  ProEdge, Power,
Air Pac, Warrior, Biolite, Maxpro, Universal Cheerleaders  Association,  Varsity
Spirit, United Spirit Association,  Co. Dance, National High School Cheerleading
Championship,  the Universal Dance Association,  Universal Dance Camps,  Varsity
Spirit Fashions and The National Dance Team Championship, among others.

                                       11
<PAGE>


     Our use of the MacGregor  trademark is limited by an agreement  with Global
Licensing  Corporation,  which owns the similar trademark  McGregor.  Under this
agreement,  the parties have agreed on certain  restrictions in the use of their
respective  trademarks.  We do not have the MacGregor  trademark  rights to golf
products.

GOVERNMENTAL REGULATION

     Our products and  accessories are subject to the Federal  Consumer  Product
Safety Act,  which empowers the Consumer  Product  Safety  Commission to protect
consumers from hazardous sporting goods and other articles. The Consumer Product
Safety  Commission has the authority to exclude from the market certain articles
which are found to be hazardous  and can require a  manufacturer  to  repurchase
such  goods.  Similar  local laws exist in some  states and cities in the United
States,  Canada and  Europe.  We  maintain  a quality  control  program  for our
protective  equipment  operations  and other products that is designed to comply
with  applicable  laws.  To date,  none of our  products  have been deemed to be
hazardous by any governmental agency.

     There is no national governing body regulating  cheerleading and dance team
activities at the collegiate level.  Although voluntary  guidelines  relating to
safety and  sportsmanship  have been issued by the NCAA and some of the athletic
conferences,  to date cheerleading and dance teams are generally free from rules
and restrictions similar to those imposed on other competitive  athletics at the
college level.  However,  if rules limiting  off-season  training are applied to
cheerleading  and/or  dance teams  similar to rules  imposed by the NCAA on some
inter-collegiate  sports,  it is  likely  that we  would  be  unable  to offer a
significant number of our camps either because  participants would be prohibited
from participating  during the summer or because enough suitable sites would not
be available.  Although we are not aware of any school officially adopting these
activities as a competitive  sport,  recognition  of  cheerleading  and/or dance
teams as "sports"  would  increase the  possibility  that  cheerleader  or dance
activities may become regulated. We currently do not believe that any regulation
of collegiate  cheerleading  or dance teams as a "sport" is  forthcoming  in the
foreseeable  future,  and in the event any rules are  proposed  to be adopted by
athletic associations, we expect to participate in the formulation of such rules
to the extent permissible.

     At the high school level, some state athletic  associations have classified
cheerleading as a sport and in some cases have imposed  certain  restrictions on
off-season  practices and out-of-state  travel to competitions.  However, in all
cases to date, we have been able to work with these state athletic  associations
to designate acceptable times for the cheerleaders within these states to attend
camps. We have also signed agreements with several state  associations to assist
with  sponsoring and executing  official  competitions  within these states.  To
date, state regulations have not had a material effect on our ability to conduct
our normal business activities.

     Operations  at all of our  facilities  are  subject  to  regulation  by the
Occupational Safety and Health Agency and various other regulatory agencies.

     Our operations are also subject to environmental  regulations and controls.
While some of the raw materials used by us may be potentially hazardous, we have
not received any material  environmental  citations or  violations  and have not
been required to spend significant amounts to comply with applicable law.

EMPLOYEES

     At December 31, 2000, we had approximately  1,250 employees.  Approximately
1,125 of these  employees  were employed on a full time basis and  approximately
125 were part time or temporary  employees.  Approximately 41 employees employed
in  manufacturing  at the  Chicago  factory are  represented  by the Chicago and
Central  States Joint Board,  Amalgamated  Clothing and Textile  Workers  Union,
under  a  collective   bargaining   agreement   which  expires  in  March  2002.
Approximately  17 of our  employees  working in  reconditioning  at our New York
facility are  represented by the Local #500A United Food and Commercial  Workers
Union (AFL-CIO) under a collective bargaining agreement which expires in January
2003. We have been discussing a renewal of this agreement with the union.

     During the summer of 2000,  we  employed  approximately  3,000  summer camp
instructors, trainers and administrators on a seasonal basis.

     We believe that our relations with our employees are satisfactory.

INSURANCE AND PRODUCT LIABILITY PROCEEDINGS

     INSURANCE

     We carry general liability  insurance with coverage limits which we believe
is adequate for our business.

                                       12
<PAGE>


     We also maintain  product  liability  insurance  under an  occurrence-based
policy providing  coverage  against all claims currently  pending against us and
future claims relating to injuries  occurring  between December 1994 and January
2005 even if such  claims  are filed  after the end of the  policy  period.  The
insurance  program  provides  certain basic and excess  coverages  with combined
aggregate  coverage of over  $40,000,000  subject to the  limitations  described
below.

     The first  level of  insurance  coverage  under the policy  provides  basic
coverage of up to $2,250,000  per claim (with an annual limit of  $4,500,000) in
excess of an uninsured retention  (deductible) of $750,000 per occurrence.  This
basic  coverage has an aggregate  limit which is currently  $6,300,000,  but the
policy  requires us to increase  this maximum  limit to  $7,700,000  by paying a
fixed annual  payment or by prepaying  the required  premium at any time,  which
counts at 120% of the amount paid toward the limit.

     The insurance program also provides for additional  coverage,  which may be
subject to certain state statutes limiting the applicability of such coverage in
certain instances,  of up to $20,000,000 per occurrence,  in excess of the first
$3,000,000 of each claim which is covered by the  uninsured  retention and basic
coverage,  to the extent  available.  Claims covered by this excess coverage are
subject to one of two separate $20,000,000 aggregate policy limits, depending on
the date of the related injury. The first $20,000,000 aggregate limit applies to
claims for injuries  occurring prior to January 31, 1998 while claims  occurring
after January 1998, are covered under the second separate $20,000,000  aggregate
limit.  Should either of these $20,000,000  aggregate limits become exhausted or
impaired, in full or in part, the policy provides that Riddell can reinstate the
affected limit back to a full $20,000,000  level upon payment of a reinstatement
premium.  Each of the $20,000,000  aggregate  limits may only be reinstated once
and the reinstatement  premium can vary from $750,000 to $2,500,000 depending on
the amount of the  reinstatement  and which of the two aggregate limits is to be
reinstated.

     There is no  certainty  that  coverage  will remain  available  to us after
January  2005 or that the  insured  amounts  will be  sufficient  to  cover  all
existing or future claims. Our product liability insurance carrier is a division
of American International Group, Inc.

     PRODUCT LIABILITY PROCEEDINGS

     We have historically been a defendant in product liability  personal injury
suits  allegedly  related  to  the  use  of  football  helmets  manufactured  or
reconditioned  by us. As of March 22, 2001,  nine product  liability  cases were
pending against us.

     In March 1999, a jury  rendered a verdict  against us and two of our wholly
owned  subsidiaries,  Riddell,  Inc. and All American Sports  Corporation,  in a
Texas lawsuit,  in the aggregate amount of $11,450,000,  $9,900,000 of which was
awarded on a product  liability  claim and  $1,550,000 of which was awarded on a
bystander  emotional  distress  claim.  On February 14, 2001,  the United States
Court of Appeals  for the Fifth  District  overturned  the  bystander  emotional
distress  claim and held that it could not be  re-tried.  The jury  award on the
product  liability  claim was also reversed and was remanded to the lower court.
We do not know whether the  plaintiff  will seek to retry the product  liability
case.

     We have  established  reserves  for pending  product  liability  claims and
determine  our reserves  based on the level of insurance  that is available  and
estimates of losses and defense and settlement  costs which we anticipate  would
result from such claims based on information available at the time the financial
statements are issued.  Due to the uncertainty  involved with estimates,  actual
results have at times varied  substantially  from earlier estimates and could do
so in the future. Accordingly, there can be no assurance that the ultimate costs
of these  claims or  potential  future  claims will fall within the  established
reserves. See Note 9 to the Consolidated Financial Statements.

                                       13
<PAGE>


ITEM 2:   PROPERTIES

     We own our principal  football  helmet  manufacturing  facility  located in
Chicago, Illinois and we lease various facilities throughout the U.S.

     We believe our  properties,  machinery  and  equipment are adequate for our
current requirements.

     Set forth below is information regarding our principal properties:

                                                                      Lease
                                                       Square       Expiration
Location              Principal Use                    Footage         Date
------------------    -----------------------------    -------    --------------

New York, New York    Corporate headquarters             3,476    September 2009

Chicago, Illinois     Headquarters of Riddell, Inc.     95,000    Owned
                      and helmet manufacturing

Elk Grove Village,    Warehouse and distribution       105,000    March 2005
  Illinois            center

Elyria, Ohio          Headquarters for All American      2,000    September 2014
                      Sports Corporation
                      reconditioning operations and
                      customer service

Stroudsburg,          Reconditioning and shoulder       44,000    October 2001
  Pennsylvania        pad customizing

Memphis, Tennessee    Headquarters for Varsity          50,000    March 2002
                      Operations

Memphis, Tennessee    Headquarters for Varsity          51,045    Commences
                      Operations                                  December 2001,
                                                                  Expires
                                                                  November 2011

Bartlett, Tennessee   Warehouse and Manufacturing      205,000    October 2010

     We also lease  several  smaller  facilities  throughout  the country.  With
respect to those  facilities whose leases expire later this year, we either have
made or  intend  to make  arrangements  to  either  extend  these  leases or for
alternate  facilities.  We do not believe that we will be harmed by any of these
lease expirations.


ITEM 3.   LEGAL PROCEEDINGS

     Riddell and its  subsidiaries  from time to time become involved in various
claims and lawsuits incidental to their businesses including without limitation,
employment related, product liability and personal injury litigation. See Item I
"Insurance and Product Liability Proceedings."

ITEM 4.   SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     None.

                                       14
<PAGE>


                                     PART II

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

     Our common  stock was quoted on The Nasdaq  National  Stock  Market  System
under the symbol RIDL through  November 20, 1998.  Commencing  November 23, 1998
our common stock was listed on the American Stock Exchange under the symbol RDL.
As of December 31, 2000, there were  approximately  717 holders of record of our
common stock.  The following  table sets forth the high and low sales prices for
our common stock as reported by the NASDAQ-NMS for the period of January 1, 1998
through  November 23, 1998,  and as reported by the American  Stock Exchange for
the rest of 1998, for 1999 and for 2000:

                                                       HIGH          LOW
Year Ended December 31, 1998:
First Quarter                                        $  5 5/8     $  4
Second Quarter                                          6 3/8        4 7/8
Third Quarter                                           5            3 3/4
Fourth Quarter                                          6 5/8        2 5/8

Year Ended December 31, 1999:
First Quarter                                           7 7/8        3 5/8
Second Quarter                                          4 3/16       3
Third Quarter                                           4            2 7/8
Fourth Quarter                                          3 1/2        2 13/16

Year Ended December 31, 2000:
First Quarter                                           3 5/8        2 15/16
Second Quarter                                          4 1/8        2 3/8
Third Quarter                                           5 3/4        2 15/16
Fourth Quarter                                          5            2

     The closing sale price of the Common Stock on December 31, 2000 was $3.00.

DIVIDEND POLICY

     Since our  inception,  we have not declared or paid,  and do not  currently
intend to declare or pay,  any  dividends  on shares of our  common  stock,  and
intend to retain future earnings for  reinvestment  in our business.  Any future
determination  to pay cash  dividends  will be at the discretion of our Board of
Directors  and will be  dependent  upon our  results  of  operations,  financial
condition,  contractual  restrictions  and other factors deemed  relevant by our
Board of Directors.  Our revolving credit facility  prohibits us from paying any
cash dividends  until such time as it has been repaid in full. In addition,  the
terms of our senior notes include  restrictions which require us to meet certain
financial ratios before cash dividends could be paid and which limit the payment
of cash  dividends to 50% of cumulative net income earned while the senior notes
are outstanding.

                                       15
<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA

     The following selected consolidated financial information should be read in
conjunction with the Consolidated Financial Statements and related note included
elsewhere in this report.

                                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

STATEMENT OF OPERATIONS DATA (1)            YEAR ENDED DECEMBER 31,
                            ----------------------------------------------------
                              2000       1999      1998(2)     1997      1996
                            --------   --------   --------   --------   -------
Net revenues                $234,721   $208,597   $186,600   $138,273   $72,382
Cost of Revenues             140,790    123,762    113,541     80,675    38,813
                            --------   --------   --------   --------   -------
Gross profit                  93,931     84,835     73,059     57,598    33,569
Selling, general and
  administrative expenses     77,072     69,210     64,617     46,278    27,853
Other charges (credits) (3)     (154)       (60)       925         --        --
                            --------   --------   --------   --------   -------
Income from operations        17,013     15,685      7,517     11,320     5,716
Interest expense              16,352     15,379     14,656     11,879     2,763
                            --------   --------   --------   --------   -------
Income (loss) before taxes
  and extraordinary item         661        306     (7,139)      (559)    2,953
                            --------   --------   --------   --------   -------
Income taxes                     100        905         --         --       110
                            --------   --------   --------   --------   -------
Income (loss) before
  extraordinary item        $    561   $   (599)  $ (7,139)  $   (559)  $ 2,843
                            ========   ========   ========   ========   =======
Earnings (loss) per share
  before extraordinary item:
  Basic                     $   0.06   $  (0.06)  $  (0.78)  $  (0.07)  $  0.35
  Diluted                       0.06      (0.06)     (0.78)     (0.07)     0.33


BALANCE SHEET DATA (1) (4)                     DECEMBER 31,
                            ---------------------------------------------------
                              2000       1999      1998(2)     1997      1996
                            --------   --------   --------   --------   -------
Working capital             $ 56,211   $ 49,908   $ 37,963   $ 37,599   $25,957
Total assets                 193,817    194,336    186,211    181,761    76,361
Long-term debt, less
  current portion            138,919    136,097    126,900    122,500    29,984
Stockholders' equity          25,872     24,865     25,451     32,125    27,745

                                          YEAR ENDED DECEMBER 31,
                            ---------------------------------------------------
                              2000       1999      1998(2)     1997      1996
                            --------   --------   --------   --------   -------
STATEMENTS OF CASH FLOWS DATA:
Cash flows from operating
  activities (5)            $  1,662   $ (6,655)  $    682   $  4,361   $(4,584)
Cash flows from investing
  activities (5)              (4,158)    (3,228)    (4,479)   (93,225)   (1,313)
Cash flows from financing
  activities (5)               3,099      8,644      4,538     89,518     5,639
OTHER DATA (UNAUDITED):
EBITDA (6)                  $ 23,157   $ 21,519   $ 13,230   $ 15,330   $ 7,909

----------
(1)  In June 1997 Riddell acquired Varsity Spirit Corporation.

(2)  Operations for 1998 were impacted by $1.5 million of losses relating to new
     product  initiatives and $3.1 million of costs (including the restructuring
     plan costs  referred  to in note 3 below)  relating  to  certain  strategic
     changes  which  were  undertaken  to  improve  future  profitability,   see
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations, " for greater detail regarding our restructuring.

(3)  Other  charges of  $925,000  in 1998  consisted  of lease  termination  and
     employee  severance costs related to a restructuring  plan adopted in 1998,
     see  "Management's  Discussion  and  Analysis of  Financial  Condition  and
     Results of Operations," for greater detail regarding our restructuring.

(4)  See Note 9 to the consolidated  financial statements relating to contingent
     liabilities.

(5)  For  more  detail  regarding  cash  flow  from  these  activities  see  the
     Consolidated Statements of Cash Flow on page F-6.

(6)  EBITDA is the sum of our earnings or loss before  extraordinary  items (and
     the cumulative effect of changes in accounting principles (as applicable)),
     interest,  income taxes, depreciation and amortization expense. EBITDA is a
     widely  accepted  financial  indicator  of a  company's  ability to service
     indebtedness. However, EBITDA should not be considered as an alternative to
     income  from  operations  or to cash flows from  operating  activities  (as
     determined in accordance with generally accepted accounting principles) and
     should not be construed as an indication of our operating performance or as
     a measure of our liquidity.  The measure of EBITDA  presented above may not
     be  comparable to similarly  titled  measures  reported by other
                                       16
<PAGE>


     companies because EBITDA is not a standardized  measure of profitability or
     cash flow as defined by generally accepted accounting principals.

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

Results of operations

     Set forth below is the percentage of our revenues  generated by each of our
three business segments in the years ended December 31, 1998, 1999 and 2000.

                                                      1998    1999    2000
                                                      ----    ----    ----
     Extracurricular Segment:
         Spirit and dance products and services       60.1%   57.7%   57.9%
         Team sports products and services            29.3%   33.1%   33.8%
                                                      ----    ----    ----
         Total extracurricular segment                89.4%   90.8%   91.7%

     Retail Segment                                    9.7%    8.7%    7.8%
     Licensing Segment                                 0.9%    0.5%    0.5%


     YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED DECEMBER 31, 1999

     Overview

     In 2000, we achieved our first  profitable  year since the  acquisition  of
Varsity Spirit in 1997. Income from operations  increased by $1.3 million.  This
improvement was achieved in spite of $1.5 million of increased expenses relating
to our Internet operations and costs of a rights offering that was contemplated,
but canceled during the year.

     Revenues  increased  both from the  continued  strong sales growth of newer
product  lines,  including  Umbro-branded  soccer  products  and  athletic  game
uniforms, as well as increased volume from our traditional lines of products and
services.  We continued  to benefit from actions  taken in prior years to reduce
costs and from the positive operating leverage that occurs as increased revenues
more efficiently  absorb the fixed, and  relatively-fixed,  portion of operating
costs.

     Our  extracurricular  segment continued to provide the vast majority of our
operating income. Its operating income increased $1.9 million from $18.5 million
in 1999 to $20.4  million  in 2000.  This was  driven by a $2.3  million  dollar
increase in the operating income of the school spirit division. Operating income
for our historical team sports operations  increased $0.7 million but was offset
by operating losses of $1.1 million from our Umbro soccer operations.

     Revenues

     Revenues in 2000  increased  $26.1  million,  or 13%, to $234.7  million in
comparison to revenues of $208.6 million in 1999.

     All of the  revenue  gain  came  from  our  extracurricular  segment  where
revenues  increased 14% or $25.8 million,  from $189.4 million in 1999 to $215.2
million in 2000.  The  extracurricular  segment  includes team sports and school
spirit lines of products and services.

     Sales of team sports  products and services  grew by 15% or $10.1  million,
from $69.1 million in 1999 to $79.2 million in 2000. Sales of our  Umbro-branded
team soccer  products and our new line of athletic  game  uniforms  generated $5
million of the increase.  We also benefited from a continued  increased focus on
sales to youth leagues as well as increased  volume and generally higher selling
prices on our traditional team sports products.

     Revenues  from school  spirit lines  products  and services  grew by 13% or
$15.7 million,  from $120.3 million in 1999 to $136.0 million in 2000. More than
half  of  the  revenue  growth  came  from  increased  volume  of  uniforms  and
accessories.  Camp and event revenues  increased as well with the number of camp
participants growing by approximately 15,000 to 230,000 in 2000.

                                       17
<PAGE>


     Revenues  from the retail  segment were $18.3  million in 2000,  increasing
slightly  from  $18.1  in  1999.  The  increases  related  to  sales  of  sports
collectible  products  which were offset in part,  by an  internal  shift in the
responsibility for certain international  customers of athletic equipment to the
extracurricular segment.

     Royalty income from trademark  licensing increased slightly in 2000 to $1.2
million from just over $1.0 million in 1999.

     Gross profit

     Gross profit in 2000 increased to $93.9 million from $84.8 million in 1999.
Gross margins  decreased as a percentage of revenues to 40.0% in 2000 from 40.7%
in 1999.

     The gross margin rate for the extracurricular segment decreased to 39.9% in
2000 from 40.8% in 1999.  This  decrease  was  largely due to a shift in product
mix, as a portion of the segment's  revenue gains occurred in product lines that
carry below average margins.  Margins from  reconditioning  operations were also
lower in 2000,  as we continued to incur  expenses  from  facilities  slated for
closure while we brought our new, more-efficient reconditioning facility online.
While selling  prices for  extracurricular  products and services were generally
higher,  margins were also negatively  impacted by the sale of some discontinued
Umbro products at lower than normal margins.

     Gross margins for the retail segment increased to 37.3% of revenues in 2000
from 35.7% of revenues in 1999. The increase in margins in 2000 was  principally
due to a shift in product mix.

     While trademark  licensing does have some costs including selling,  general
and administrative expenses, there are no costs that are deducted in arriving at
gross profit. Accordingly, any increase or decrease in royalty income results in
a corresponding increase or decrease in gross profit for the licensing segment.

     Selling, general and administrative expenses

     Selling,  general and  administrative  expenses in 2000  increased  by $7.7
million  from $69.2  million in 1999 to $76.9  million  in 2000.  This  increase
included $1.7 million of increased  commissions  relating to higher sales,  $1.2
million higher expenses due to the start-up of the athletic game uniform product
line, a $1.2 million increase in internet  expenses and $0.3 million relating to
a  cancelled  rights  offering.   Despite  these  costs,  selling,  general  and
administrative expenses decreased as a percentage of sales to 32.8% in 2000 from
33.2% in 1999. This improvement is principally due to the improved absorption of
the relatively fixed portions of selling,  general and  administrative  expenses
resulting  from the increases in revenues,  a  continuation  of a trend noted in
prior periods.

     Extracurricular  segment  selling,   general  and  administrative  expenses
decreased as a percentage of revenues to 30.4% of revenues in 2000 from 31.1% in
1999. The  improvement in the expense ratio was due to the reasons  discussed in
the preceding paragraph.

     Retail segment selling,  general and administrative expenses increased as a
percentage of revenues to 30.3% of revenues in 2000 from 29.2%. Higher marketing
expenses resulted in the increased expense rate.

     Licensing segment selling,  general and administrative expenses were stable
in  comparison  to the prior year,  at just below $0.8  million in both 2000 and
1999.

     Interest expense

     Interest  expense in 2000  increased  6%, or $1.0 million over 1999 levels.
The increase  related to our revolving line of credit and was due to an increase
in average  indebtedness  and increases in the prime and Libor  interest  rates.
Outstanding  indebtedness increased in line with working capital demands related
to our line of  Umbro-branded  soccer  products,  which was still in its initial
start-up  phase in the early part of 1999,  and volume  growth in other  product
lines.

     Income taxes

     Income tax expense in 2000 consisted of a provision for federal alternative
minimum  tax,  with an  offsetting  deferred tax  benefit,  and a provision  for
current  state income  taxes.  Income tax expense in 1999 reflects an adjustment
relating  to the  valuation  of  deferred  taxes.  No other net tax  expense was
recorded  in 2000 or 1999 as we have net  operating  loss carry  forwards  which
offset any such taxes.

                                       18
<PAGE>


     The net loss carry forwards result from  unrecognized  tax benefits arising
from net operating losses in years prior to 1999. The remaining unrecognized tax
benefit would be utilized with the generation of  approximately  $1.5 million of
future pre-tax income and adjustments.

     We have certain nondeductible annual expenses that are added as adjustments
to pretax  income to  calculate  taxes.  These  expenses  include  nondeductible
amortization of approximately  $2.1 million,  much of which arises from goodwill
associated with the Varsity  acquisition.  The effect of these  adjustments,  as
well as other items effecting our tax rates, are shown in the  reconciliation of
our tax  provision  to taxes  based on  statutory  rates shown in Note 10 to our
Consolidated Financial Statements.

     YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR ENDED DECEMBER 31, 1998

     Overview

     In 1999, we achieved  significant  improvement in the  profitability of our
business.  Income before taxes increased $7.4 million,  from a $7.1 million loss
in 1998 to a profit before taxes of $0.3 million in 1999.

     Revenues  increased both from initial sales of new product lines as well as
increased  volume from our traditional  lines of products and services.  We also
began to see  benefits  from  actions  taken  late in 1998 to  reduce  costs and
improve  profitability.  Some of these actions  resulted in charges that totaled
$3.1 million,  which  contributed  to our loss in 1998.  These charges  included
$925,000  classified as a restructuring  charge and are discussed in more detail
below in the discussion of the restructuring plan.

     Most of our operating  improvement occurred in our extracurricular  segment
where  operating  income  increased  $7.1 million from $11.4  million in 1998 to
$18.5 million in 1999. We also achieved  significant  improvement  in our retail
segment  which  generated  operating  income of $1.2  million  in 1999,  up from
operating income of under $0.1 million in 1998.

     Our pre-tax profit in 1999 was achieved notwithstanding expenses and losses
of  approximately  $1.8 million relating  primarily to two new initiatives,  our
strategy for the Internet and our entry into the U.S. team-soccer market through
our  license  from  Umbro,  both of which  provide  us with  significant  growth
potential.  The $1.8  million  includes  approximately  $0.5 million of expenses
incurred  as we began to develop our  Internet  operations  and $1.3  million of
losses  relating  to the  start-up  of our line of  Umbro  branded  team  soccer
products which began at the end of 1998.

     Revenues

     Revenues in 1999  increased  $22.0  million,  or 12%, to $208.6  million in
comparison to revenues of $186.6 million in 1998.

     All of the  revenue  gain  came  from  our  extracurricular  segment  where
revenues  increased 14% or $22.6 million,  from $166.8 million in 1998 to $189.4
million in 1999.  The  extracurricular  segment  includes team sports and school
spirit lines of products and services.

     Sales of team sports  products and services  grew by 27% or $14.5  million,
from $54.6  million in 1998 to $69.1  million in 1999.  Sales of our new line of
Umbro-branded  team soccer  products and our new line of athletic  game uniforms
generated $9 million of the increase.  We also benefited from increased focus on
sales to youth leagues as well as increased  volume and generally higher selling
prices on our traditional team sports products.

     Revenues from school spirit lines  products and services grew by 7% or $8.1
million,  from $112.2 million in 1998 to $120.3 million in 1999.  More than half
of the revenue  growth came from increased  volume of uniforms and  accessories.
Camp and event revenues  increased as well with the number of camp  participants
growing by 8,000 to 215,000 in 1999 after being relatively flat between 1997 and
1998.

     Revenues from the retail  segment were $18.1 million in both 1998 and 1999.
Sales of sports  collectible  products  increased  while there was an offsetting
decease in the  volume of youth  football  equipment  sold to  retailers,  as we
shifted our youth emphasis to direct sales within our extracurricular segment.

     Royalty income from trademark  licensing  decreased by $0.6 million to just
over $1.0 million in 1999 in comparison to trademark licensing royalties of $1.6
million in 1998.  The decline was  anticipated  due to the expiration of certain
licenses in 1998.

                                       19
<PAGE>


     Gross profit

     Gross profit in 1999 increased to $84.8 million from $73.1 million in 1998.
Gross margins  increased as a percentage of revenues to 40.7% in 1999 from 39.2%
in 1998.  Gross margins in 1998 had been negatively  impacted by $1.7 million of
charges  relating to product line changes and other  strategic  decisions  which
affected the realizable  value of inventories.  Gross margins in 1998 were 40.1%
if adjusted to eliminate the impact of these charges.

     The gross margin rate for the extracurricular segment increased to 40.8% in
1999 from  39.5% in 1998.  Gross  margins  in 1998  were  40.2% if  adjusted  to
eliminate  the impact of the portion of the 1998 charges  discussed  above which
related to the  extracurricular  segment.  Margin  rates  improved  in 1999 as a
result of modest  increases  in  selling  prices,  favorable  negotiations  with
vendors and contractors, improved leverage due to higher absorption of the fixed
portion of operating  costs  against  higher  revenue and certain  other actions
taken at the end of 1998 which reduced costs in 1999.

     Gross margins for the retail segment increased to 35.7% of revenues in 1999
from 31.0% of revenues in 1998.  Gross margins in 1998 were 33.7% if adjusted to
eliminate  the impact of the portion of the 1998 charges  discussed  above which
related to the retail  segment.  The increase in margins in 1999 was principally
due to a shift in  product  mix as the  decline  in  retail  segment  sales,  as
discussed  above,  occurred in product lines that carry below average margins in
the segment.  Many of the factors  contributing to the margin improvement in the
extracurricular segment also contributed to the margin improvement in the retail
segment.

     While trademark  licensing does have some costs including selling,  general
and administrative expenses, there are no costs that are deducted in arriving at
gross profit. Accordingly, any increase or decrease in royalty income results in
a corresponding increase or decrease in gross profit for the licensing segment.

     Selling, general and administrative expenses

     Selling,  general and  administrative  expenses in 1999  increased  by $4.6
million  from $64.6  million in 1998 to $69.2  million  in 1999.  This  increase
included $1.5 million of  commissions  relating to higher sales and $3.4 million
of expense  increases  relating  to our new line of  Umbro-branded  team  soccer
products  leaving a net overall  decrease of $0.3 million in all other  selling,
general  and  administrative  expenses.   Selling,  general  and  administrative
expenses decreased as a percentage of sales to 33.2% in 1999 from 34.6% in 1998.
Selling,  general  and  administrative  expenses  in 1998 were  impacted by $0.4
million of charges relating to strategic changes,  as discussed above, and would
have been 34.4% of revenues before consideration of this charge. The improvement
in the  expense  percentage  in  1999  is  principally  due to the  cost  saving
initiatives  implemented  at the  end of 1998  and  improved  absorption  of the
relatively  fixed  portions of  selling,  general  and  administrative  expenses
resulting  from the  increase  in  revenues.  Expenses  in 1999 were  negatively
impacted  by  approximately   $0.5  million  of  expenses  incurred  in  initial
development costs relating to our Internet operations.

     Extracurricular  segment  selling,   general  and  administrative  expenses
decreased as a percentage of revenues to 31.1% of revenues in 1999 from 32.5% in
1998. The  improvement in the expense ratio was due to the reasons  discussed in
the preceding  paragraph.  Expenses in 1998 included $0.3 million of the charges
relating to strategic changes, as discussed above.

     Retail segment selling,  general and administrative expenses decreased as a
percentage  of revenues  to 29.2% of  revenues  in 1999 from 30.7% in 1998.  The
improvement  in  the  expense  ratio  was  due to the  cost  saving  initiatives
implemented  at the end of  1998,  as  well as  planned  reductions  in  product
development costs.

     Licensing segment selling,  general and administrative expenses were stable
in comparison to the prior year, at approximately  $0.8 million in both 1999 and
1998.

     Interest expense

     Interest expense in 1999 increased 5%, or $0.7 million over 1998 levels due
to an increase in average  indebtedness.  Debt levels were higher in 1999 due to
higher  indebtedness  at the beginning of 1999 than at the beginning of 1998 and
increased working capital demands related to our new line of Umbro-branded  team
soccer products and volume growth in other product lines.

     Income taxes

                                       20
<PAGE>


     Income tax expense in 1999 reflects an adjustment relating to the valuation
of deferred  taxes and not a cash payment of taxes.  No tax expense,  other than
this  adjustment,  was  recorded in 1999,  as we have net  operating  loss carry
forwards which offset any such taxes, as described above.

Umbro license

     In 1998, we entered into a license agreement with Umbro International, Inc.
which  entitles us to market and  manufacture  Umbro brand soccer team  apparel,
footwear, equipment and accessories on an exclusive basis to the team channel of
distribution  throughout  the United  States,  Puerto  Rico and the U.S.  Virgin
Islands.  The term of the  license  is five years with an option to renew for an
additional  five-year  period if we  achieve  certain  performance  levels.  The
license was royalty-free in 1999. We began paying royalties in the year 2000, at
which time we are also required to meet annual minimum sales figures. If we fail
to meet  required  minimum sales levels  subsequent to 1999 for two  consecutive
annual periods, Umbro has the right to terminate the license.

     Our subsidiary,  Varsity  Fashions and Supplies,  Inc. has recently filed a
lawsuit in the  Southern  District  of New York  against  Umbro and its  related
companies  seeking to prevent  certain  breaches by Umbro of its agreement  with
Varsity  pertaining  to, INTER ALIA, its sale of products into the United States
via the  Internet and its  threatened  change of market  positioning  of certain
Umbro products  previously  sold by Signal  Apparel,  Inc. We do not believe the
lawsuit will have a material adverse effect on the company.

MacGregor trademark

     We  acquired  certain  rights  to the  MacGregor  trademark  as  part of an
acquisition in 1988 at an allocated cost of approximately  $18.0 million. We are
amortizing the trademark over a period of forty years.  The unamortized  cost of
this asset included in intangible  assets at December 31, 2000 was approximately
$12.3 million (See Note 5 of the Consolidated  Financial  Statements).  If there
were a material decline in the revenues from the MacGregor  trademark,  then the
carrying amount of the MacGregor  trademark  rights could be deemed to have been
impaired.  A write-down for such impairment could have a material adverse effect
on our financial position and results of operations.

Restructuring plan

     In the fourth quarter of 1998 we formulated  and initiated a  restructuring
plan involving the consolidation of several of our reconditioning facilities and
the  elimination  of  approximately  40 jobs  including  two  senior  positions.
Together  these  actions  led to a $925,000  restructuring  charge in 1998.  The
charge  included a provision of  $800,000,  included in accrued  liabilities  at
December 31, 1998, for certain lease  termination and employee  severance costs,
most of which were  expected  to be  expended  during  1999.  The  restructuring
actions are expected to yield annual  savings of over $1.0 million once facility
closures are completed and new centralized operations are fully implemented. The
restructuring  actions  resulted in cost  savings of  approximately  $400,000 in
1999, net of non-recurring  current year expenses of $160,000 for  restructuring
related costs such as moving  expenses.  Restructuring  savings  realized during
2000 were approximately  $600,000.  It is estimated the remaining annual benefit
will be realized during 2001.

     The  initial   restructuring   plan  called  for  essentially  all  of  our
restructuring activities to have been completed by the end of 1999. We completed
and  commenced  operations  of a new,  larger  reconditioning  facility in 1999.
However, the consolidation of reconditioning facilities originally scheduled for
the fall of 1999 was delayed until the second  quarter of 2000. The cessation of
reconditioning  operations  at certain  other  facilities  was  delayed to allow
additional time for the new reconditioning facility to reach full capacity. As a
result,  while the anticipated senior positions were eliminated in 1998, none of
the  employee   severance   costs  related  to  the   elimination   of  jobs  at
reconditioning  facilities  was expended  until 2000.  Additionally,  one of the
leased  reconditioning  facilities  originally  slated for  closure is now being
utilized for the alternative purpose of warehousing finished goods.

     The initial  restructuring charge in 1998 included a provision of $800,000,
included  in accrued  liabilities  at  December  31,  1998,  for  certain  lease
termination and employee  severance  costs. In 1999,  approximately  $480,000 of
these costs were paid and $60,000 of lease  termination  costs were  reversed to
income when it was determined the facility would be used for alternate purposes,
as  discussed  above,  leaving a balance of $260,000 in accrued  liabilities  at
December 31, 1998.  In 2000,  $106,000 of these costs were paid on completion of
the plan and the unused  remaining  balance of $154,000  was reversed to income.
The unused balance  principally  related to severance costs that were not needed
as the  displaced  employees  were placed  elsewhere in the Company in positions
that became open due to normal attrition and growth in other areas.

                                       21
<PAGE>


Liquidity and capital resources

     The seasonality of our working capital needs is primarily impacted by three
factors.  First,  a  significant  portion  of the  products  we  sell  into  the
extracurricular  segment are sold  throughout the year on  dated-payment  terms,
with the related receivables becoming due when the school year begins during the
following July to October period.  Second, we incur costs relating to our summer
camp business during the first and second quarter as we prepare for the upcoming
camp  season,  while camp  revenues  are mostly  collected in the June to August
period.  Lastly, our debt structure impacts our working capital  requirements as
the semi-annual  interest payments on our $115 million,  10.5% Senior Notes come
due each January and July.

     To finance these seasonal  working  capital  demands,  we maintain a credit
facility in the form of a revolving line of credit.  The outstanding  balance on
the credit facility  follows the seasonal  cycles  described  above,  increasing
during the early part of the operating cycle in the first and second quarters of
each year and then decreasing from the third quarter and into the fourth quarter
as collections are used to reduce the outstanding balance.

     At December 31, 2000 the outstanding  balance under the credit facility was
$16.4  million.  This  compares  with  outstanding  balances of $13.6 million at
December 31, 1999. The increase in outstanding  borrowings  between December 31,
1999 and December 31, 2000 reflects the factors discussed above in the paragraph
on interest  expense in the  comparison of results of  operations  between these
periods.

     Our current debt service obligations are significant and, accordingly,  our
ability to meet our debt service and other obligations will depend on our future
performance  and is subject to financial,  economic and other  factors,  some of
which are beyond our control.  Furthermore,  due to the  seasonality  of working
capital  demands  described  above,  year-over-year  growth in our  business and
working capital could lead to higher debt levels in future  periods.  We believe
that operating cash flow together with funds  available from our credit facility
will be sufficient to fund our current debt service,  seasonal and other current
working capital requirements.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See Item 14(a) in Part IV and page F-1 of this Report.

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

     None.

                                    PART III

     The Registrant hereby  incorporates by reference,  in response to Part III,
its Proxy  Statement for its 2001 Annual Meeting of  Stockholders to be filed on
or before April 30, 2001 (except to the limited extent the rules and regulations
of the Commission  authorize  certain sections of such Proxy Statement not to be
incorporated  herein by  reference,  as  specifically  indicated  in such  Proxy
Statement).

                                     PART IV

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

     (a)(1)  and  (a)(2)   Financial   Statements  and  Schedules  to  Financial
     Statements

            The  financial  statements,   notes  thereto,   financial  statement
            schedules and accountants'  report listed in the "Index to Financial
            Statements"  on page F-1 of this  Report  are  filed as part of this
            Report.

     (a)(3) Exhibits

            The exhibits listed in the Exhibit Index attached to this Report are
            filed as part of this Report.

      (b)   Reports on Form 8-K

            None.
<PAGE>


                                   SIGNATURES

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

                                            RIDDELL SPORTS INC.



Dated:  March 29, 2001                      By:             DAVID MAUER
                                                --------------------------------
                                                     Chief Executive Officer

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



DAVID MAUER                  Chief Executive Officer             March 29, 2001
---------------------        and Director
David M. Mauer               (Principal Executive Officer)

ROBERT  NEDERLANDER          Chairman of the Board               March 29, 2001
---------------------
Robert Nederlander

JEFFREY G. WEBB              Vice Chairman of the Board          March 29, 2001
---------------------        and Chief Operating Officer
Jeffrey G. Webb

LEONARD TOBOROFF             Vice President and Director         March 29, 2001
---------------------
Leonard Toboroff

DAVID GROELINGER             Executive Vice President and        March 29, 2001
---------------------        Chief Financial Officer
David Groelinger             (Principal Financial Officer)


LAWRENCE SIMON               Senior Vice President               March 29, 2001
---------------------        (Principal Accounting Officer)
Lawrence Simon

DON KORNSTEIN                Director                            March 29, 2001
---------------------
Don Kornstein

JOHN MCCONNAUGHY, JR.        Director                            March 29, 2001
---------------------
John McConnaughy, Jr.

                             Director                            March 29, 2001
---------------------
Glenn E. Schembechler

ARTHUR N. SEESSEL            Director                            March 29, 2001
---------------------
Arthur N. Seessel

                                       23
<PAGE>


Item 14(c)     PART IV

               Exhibit Index

EXHIBIT
NUMBER         DESCRIPTION

 2.1          Agreement  and Plan of Merger,  dated as of May 5,  1997,  by and
              among Riddell Sports Inc.,  Cheer  Acquisition  Corp. and Varsity
              Spirit Corporation (15).

 3.1          Articles of Incorporation of Riddell Sports Inc. (11).

 3.2          First Amended and Restated Bylaws of Riddell Sports Inc. (9).

 3.3          Certificate of Incorporation  of All American Sports  Corporation
              (formerly known as Ameracq Corp) (17).

 3.4          Bylaws of All  American  Sports  Corporation  (formerly  known as
              Ameracq Corp) (17).

 3.5          Certificate of Incorporation of Cheer Acquisition Corp. (17).

 3.6          Bylaws of Cheer Acquisition Corp. (17).

 3.7          Certificate of  Incorporation of Equilink  Licensing  Corporation
              (17).

 3.8          Bylaws of Equilink Licensing Corporation (17).

 3.9          Certificate of Incorporation of Proacq Corp. (17).

 3.10         Bylaws of Proacq Corp. (17).

 3.11         Certificate of Incorporation of RHC Licensing Corporation (17).

 3.12         Bylaws of RHC Licensing Corporation (17).

 3.13         Amended and Restated  Articles of Incorporation of Riddell,  Inc.
              (formerly known as EN&T Associates Inc.) (17).

 3.14         Bylaws of Riddell,  Inc. (formerly known as EN&T Associates Inc.)
              (17).

 3.15         Amended  and  Restated   Articles  of  Incorporation  of  Ridmark
              Corporation (17).

 3.16         Bylaws of Ridmark Corporation (17).

 3.17         Charter of International Logos, Inc. (17).

 3.18         Bylaws of International Logos, Inc. (17).

 3.19         Charter of Varsity/Intropa Tours, Inc. (17).

 3.20         Bylaws of Varsity/Intropa Tours, Inc. (17).

 3.21         Amended  and  Restated  Charter  of  Varsity  Spirit  Fashions  &
              Supplies, Inc. (17).

 3.22         Bylaws of Varsity Spirit Fashions & Supplies, Inc. (17).

 3.23         Amended and Restated Charter of Varsity USA, Inc. (17).

 3.24         Bylaws of Varsity USA, Inc. (17).

 4.1          Indenture,  dated as of June 19, 1997,  between Riddell,  certain
              subsidiaries  of Riddell Sports Inc., as  guarantors,  and Marine
              Midland Bank, as Trustee (14).

                                       24
<PAGE>


   9.1         Voting Trust Agreement dated May 1991 (2).

  10.1         Settlement Agreement, dated April 9, 1981, among McGregor-Doniger
               Inc., Brunswick Corporation and The Equilink Corporation (2).

  10.2         1997 Stock Option Plan (13).

  10.3         Lease, dated November 12, 1993, between the International
               Brotherhood of Painters and Allied Trade Union and Industry
               Pension Fund and Riddell, Inc., (8); and Amendment dated
               March 20, 1995 (8); and Amendment dated September 19, 1996
               (12); and Amendment dated February 2000 (20).

  10.4         Lease  Agreement,  dated April 1991,  by and between  Stroudsburg
               Park  Associates and All American Corp. (3); as amended March 31,
               1995 (9).

  10.5         1991 Stock Option Plan (2) as amended by amendments  described in
               Riddell Sports Inc.'s proxy materials for its annual stockholders
               meetings held on August 20, 1992,  September  30, 1993,  June 27,
               1996 and June 24, 1997.

  10.6         Employment Agreement, dated June 22, 1992, between Riddell Sports
               Inc. and Robert F. Nederlander (4); amended July 27, 1994 (6).

  10.7         Employment Agreement, dated June 22, 1992, between Riddell Sports
               Inc. and Leonard Toboroff (4); amended July 27, 1994 (6).

  10.8         Employment Agreement,  dated March 19, 1993, commencing March 25,
               1993 between David Mauer and Riddell  Sports Inc. (5), as amended
               January 17, 1994; November 1, 1994 (7); November 28, 1994 (8).

  10.9         Employment Agreement,  dated as of March 7, 1996, between Riddell
               Sports Inc. and David  Groelinger  (10), as amended March 7, 1998
               (18) and as amended March 1, 2000 (20).

  10.10        Note Purchase Agreement,  dated October 30, 1996, between Riddell
               Sports Inc. and Silver Oak Capital,  L.L.C., as amended by letter
               agreement dated May 2, 1997 (11).

  10.11        Registration  Rights Agreement,  dated November 8, 1996,  between
               Riddell Sports Inc. and Silver Oak Capital L.L.C. (11).

  10.12        Shareholders Agreement,  dated as of May 5, 1997, between Riddell
               Sports Inc., Cheer Acquisition Corp. and certain  shareholders of
               Varsity Spirit Corporation (16).

  10.13        Employment  Agreement,  dated as of May 5, 1997,  between Riddell
               Sports Inc. and Jeffrey G. Webb (16).

  10.14        Employment  Agreement,  dated as of May 5, 1997,  between Riddell
               Sports  Inc.  and W. Kline Boyd (16),  as amended  August 2, 1999
               (20).

  10.15        Umbro License  Agreement,  dated as of November 23, 1998, between
               Umbro International, Inc. and Varsity Spirit Fashions & Supplies,
               Inc. (19).

  10.16        Asset and USISL Stock  Purchase  Agreement,  dated as of November
               1998,  between  Umbro  International,  Inc.  and  Varsity  Spirit
               Fashions & Supplies, Inc. (19).

  10.17        Amended and Restated Loan,  Guaranty And Security Agreement dated
               as of April 20,  1999  among  the  financial  institutions  named
               therein,  as the  Lenders,  Bank of  America  National  Trust and
               Savings  Association,  as the Agent,  Riddell Sports Inc., as the
               Parent Guarantor, Riddell, Inc., All American Sports Corporation,
               Varsity  Spirit  Corporation,   and  Varsity  Spirit  Fashions  &
               Supplies,  Inc.  collectively,  as the  Borrower  and  all  other
               subsidiaries  of  the  Parent  Guarantor,  collectively,  as  the
               Subsidiary  Guarantors  (19),  as amended July 16, 1999 (20),  as
               amended  January 1, 2000 (20),  as amended  December 31, 2000 (1)
               and as amended December 31, 2000 (1).

                                       25
<PAGE>


  10.18        Industrial  Lease and Agreement  dated  October 1, 1998,  between
               Laphiew Gin Company and Varsity Spirit Corporation (19).

  10.19        Sublease between Nederlander Television and Film Production, Inc.
               and Riddell Sports Inc., as amended (20).

  10.20        Agreement  to Build  and  Lease  dated as of  December  30,  1998
               between MMCA Development, LLC and All American Sports Corporation
               (20), as amended February 1, 2000 (20).

  10.21        Employment Agreement,  dated as of March 1, 2000, between Riddell
               Sports Inc. and Greg Webb (1).

  10.22        Industrial  Lease Agreement dated August 22, 2000 between Riddell
               Sports,  Inc.  and Belz  Investco GP (1), as amended  January 24,
               2001 (1) and as amended February 13, 2001.

  10.23        Lease  Agreement  dated  February 1, 2001 between  Riddell Sports
               Inc. and Lenox Park Building F Partners (1).

  21           List of subsidiaries (17).

  23           Consent of Grant Thornton LLP regarding Riddell Sports Inc. (1).


----------
(1)  Filed herewith.

(2)  Incorporated by reference to Riddell Sports Inc.'s  Registration  Statement
     on Form  S-1  (Commission  File  No.  33-40488)  effective  June  27,  1991
     (including all pre-effective amendments to the Registration Statement).

(3)  Incorporated  by  reference  to  Riddell  Sports  Inc.'s  Form 10-K  report
     (Commission File No. 0-19298) for the year ended December 31, 1991.

(4)  Incorporated  by  reference  to  Riddell  Sports  Inc.'s  Form 10-Q  report
     (Commission File No. 0-19298) for the quarter ended June 30, 1992.

(5)  Incorporated  by  reference  to  Riddell  Sorts  Inc.'s  Form  10-K  report
     (Commission File No. 0-19298) filed on March 30, 1993.

(6)  Incorporated  by  reference  to  Riddell  Sports  Inc.'s  Form 10-Q for the
     quarter ended June 30, 1994.

(7)  Incorporated  by  reference  to  Riddell  Sports  Inc.'s  Form 10-Q for the
     quarter ended September 30, 1994.

(8)  Incorporated  by reference to Riddell  Sports Inc.'s Form 10-K for the year
     ended December 31, 1994.

(9)  Incorporated  by reference to Riddell  Sports Inc.'s Form 10-K for the year
     ended December 31, 1995, dated November 11, 1996.

(10) Incorporated  by reference to Riddell Sports Inc.'s Form 10-Q dated May 14,
     1996.

(11) Incorporated by reference to Riddell Sports Inc.'s Form 10-Q dated November
     11, 1996.

(12) Incorporated  by reference to Riddell  Sports Inc.'s Form 10-K for the year
     ended December 31, 1996.

(13) Incorporated  by reference to Riddell Sports Inc.'s Proxy  Statement  filed
     June 6, 1997.

(14) Incorporated by reference to Riddell Sports Inc..'s Form 8-K dated June 19,
     1997.

(15) Incorporated by reference to Riddell Sports Inc.'s Report on Form 8-K filed
     May 8, 1996.

                                       26
<PAGE>


(16) Incorporated by reference to Varsity Spirit Corporation  Schedule 13D filed
     June 25, 1997.

(17) Incorporated by reference to Riddell Sports Inc.'s  Registration  Statement
     on Form S-4 (Registration No. 333-31525) filed July 18, 1997.

(18) Incorporated by reference to Riddell Sports Inc.'s Form 10-K Report for the
     year ended 1997 (File No. 0-19298).

(19) Incorporated by reference to Riddell Sports Inc.'s Form 10-K Report for the
     year ended 1998 (File No. 0-19298).

(20) Incorporated by reference to Riddell Sports Inc.'s Form 10-K Report for the
     year ended 1999 (File No. 0-19298).

                                       27

<PAGE>


                          INDEX TO FINANCIAL STATEMENTS

                                                                            PAGE
                                                                            ----

Report of Independent Certified Public Accountants .....................     F-2

Consolidated Balance Sheets at December 31, 2000 and 1999 ..............     F-3

Consolidated Statements of Operations for the years ended
    December 31, 2000, 1998 and 1998 ...................................     F-4

Consolidated Statements of Stockholders' Equity for the years
    ended December 31, 2000, 1999 and 1998 .............................     F-5

Consolidated Statements of Cash Flows for the years ended
    December 31, 2000, 1999 and 1998 ...................................     F-6

Notes to Consolidated Financial Statements .............................     F-7


Financial Statement Schedules

    Report of Independent Certified Public Accountants on Schedule .....     S-1

    Schedule II - Valuation and Qualifying Accounts ....................     S-2

    All other financial statement schedules are omitted as the required
    information  is presented in the financial  statements or the notes
    thereto or is not necessary.








                                       F-1


<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS






Board of Directors
Riddell Sports Inc.

         We have audited the accompanying consolidated balance sheets of Riddell
Sports Inc. (a Delaware  corporation)  and  Subsidiaries as of December 31, 2000
and 1999, and the related consolidated  statements of operations,  stockholders'
equity and cash flows for each of the three years in the period  ended  December
31, 2000. These financial statements are the responsibility of the management of
Riddell  Sports  Inc.  Our  responsibility  is to  express  an  opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the consolidated financial position of Riddell
Sports  Inc.  and  Subsidiaries  as of  December  31,  2000  and  1999,  and the
consolidated  results of their operations and their  consolidated cash flows for
each of the three years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America.


                                                          GRANT THORNTON LLP


Chicago, Illinois
February 20, 2001


                                       F-2

<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                                 ----------------------
                                                                                   2000          1999
                                                                                 --------      --------
                                                       ASSETS
<S>                                                                               <C>           <C>
Current assets:
   Cash ....................................................................       $1,116          $513
   Accounts receivable, trade, less allowance for doubtful
     accounts ($1,247 and $1,863 respectively) .............................       35,245        32,524
   Inventories .............................................................       32,807        33,388
   Prepaid expenses ........................................................        6,419         7,578
   Other receivables .......................................................        2,070         2,020
   Deferred taxes ..........................................................        2,270         2,076
                                                                                 --------      --------
           Total current assets ............................................       79,927        78,099
Property and equipment, less accumulated depreciation ......................        8,543         7,771
Intangible assets and deferred charges, less accumulated amortization ......      102,388       105,952
Other assets ...............................................................        2,959         2,514
                                                                                 --------      --------
               Total assets ................................................     $193,817      $194,336
                                                                                 ========      ========


                                        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable ........................................................       $7,340       $10,318
   Accrued liabilities .....................................................       10,886        11,783
   Customer deposits .......................................................        5,490         6,090
                                                                                 --------      --------
           Total current liabilities .......................................       23,716        28,191
Long-term debt, less current portion .......................................      138,919       136,097
Deferred taxes .............................................................        2,270         2,076
Other liabilities ..........................................................        3,040         3,107
Commitments and contingent liabilities .....................................           --            --

Stockholders' equity:
   Preferred stock, $.01 par; authorized 5,000,000 shares; none issued .....           --            --
   Common stock, $.01 par; authorized 40,000,000 shares; issued
     and outstanding 9,452,250 and 9,263,957 shares, respectively ..........           95            93
   Capital in excess of par ................................................       37,306        36,862
   Accumulated deficit .....................................................      (11,529)      (12,090)
                                                                                 --------      --------
           Total stockholders' equity ......................................       25,872        24,865
                                                                                 --------      --------
               Total liabilities and stockholders' equity ..................     $193,817      $194,336
                                                                                 ========      ========
</TABLE>


                 See notes to consolidated financial statements

                                       F-3


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>

                                                                   YEARS ENDED DECEMBER 31,
                                                              --------------------------------
                                                                2000        1999        1998
                                                              --------    --------    --------
<S>                                                           <C>         <C>         <C>
Net revenues:
   Net sales, products and reconditioning...................  $176,659    $156,411    $136,283
   Camps and events.........................................    56,856      51,130      48,704
   Royalty income...........................................     1,206       1,056       1,613
                                                              --------    --------    --------
                                                               234,721     208,597     186,600
                                                              --------    --------    --------
Costs of revenues:
   Products and reconditioning..............................   102,652      89,166      79,611
   Camps and events.........................................    38,138      34,596      33,930
                                                              --------    --------    --------
                                                               140,790     123,762     113,541
                                                              --------    --------    --------
Gross profit................................................    93,931      84,835      73,059
Selling, general and administrative expenses................    77,072      69,210      64,617
Other charges (credits).....................................      (154)        (60)        925
                                                              --------    --------     -------
Income from operations......................................    17,013      15,685       7,517
Interest expense............................................    16,352      15,379      14,656
                                                              --------    --------    --------
Income (loss) before taxes..................................       661         306      (7,139)
Income taxes................................................       100         905          --
                                                              --------    --------    --------
Net income (loss)...........................................      $561       ($599)    ($7,139)
                                                              ========    ========    ========

Net income (loss) per share, basic and diluted..............     $0.06      ($0.06)     ($0.78)


Weighted average number of common and common
  equivalent shares outstanding:
     Basic..................................................     9,389       9,260       9,134
     Diluted ...............................................     9,471       9,260       9,134
</TABLE>






                 See notes to consolidated financial statements

                                       F-4


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                          RETAINED
                                        COMMON STOCK        ADDITIONAL    EARNINGS       TOTAL
                                   ---------------------      PAID IN  (ACCUMULATED   STOCKHOLDERS'
                                    SHARES        AMOUNT      CAPITAL     DEFICIT)       EQUITY
                                   --------     --------     --------     --------      --------
<S>                                  <C>            <C>      <C>          <C>           <C>
Balance, January 1, 1998 .......      9,079          $91      $36,386      ($4,352)      $32,125
   Issuance of common stock
     upon exercise of stock
     options and warrants ......         99            1          136           --           137
   Stock issued to employees ...         81            1          327           --           328
   Net (loss) for the year .....         --           --           --       (7,139)       (7,139)
                                   --------     --------     --------     --------      --------
Balance, December 31, 1998 .....      9,259           93       36,849      (11,491)       25,451
   Issuance of common stock upon
     exercise of stock options .          4           --           13           --            13
   Net (loss) for the year .....         --           --           --         (599)         (599)
                                   --------     --------     --------     --------      --------
Balance, December 31, 1999 .....      9,263           93       36,862      (12,090)       24,865
   Stock issued to employees ...         54           --          169           --           169
   Issuance of common stock upon
     exercise of stock options .        135            2          275           --           277
   Net income for the year .....         --           --           --          561           561
                                   --------     --------     --------     --------      --------
Balance, December 31, 2000 .....      9,452          $95      $37,306     ($11,529)      $25,872
                                   ========     ========     ========     ========      ========
</TABLE>











                 See notes to consolidated financial statements

                                       F-5


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                         YEARS ENDED DECEMBER 31,
                                                                   ---------------------------------
                                                                     2000        1999         1998
                                                                   -------      -------      -------
<S>                                                                <C>          <C>          <C>
Cash flows from operating activities:
   Net income (loss) .........................................        $561        ($599)     ($7,139)
   Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
     Depreciation and amortization:
       Amortization of debt issue costs ......................         863          843          803
       Other depreciation and amortization ...................       6,144        5,834        5,713
     Compensation expense for stock issued to employees ......          --           --          199
     Provision for losses on accounts receivable .............       1,173        1,196          929
     Deferred taxes ..........................................          --          905           --
     Change in assets and liabilities (net
      of effects from acquisitions):
       (Increase) decrease in:
         Accounts receivable, trade ..........................      (3,894)      (5,704)      (2,520)
         Inventories .........................................         604       (4,625)      (4,697)
         Prepaid expenses ....................................       1,167       (1,085)         307
         Other receivables ...................................         (50)        (376)         (82)
         Other assets ........................................        (445)        (830)         212
       Increase (decrease) in:
         Accounts payable ....................................      (3,008)      (2,426)       4,367
         Accrued liabilities .................................        (741)         530          664
         Customer deposits ...................................        (645)         129        1,432
         Other liabilities ...................................         (67)        (447)         494
                                                                   -------      -------      -------
           Net cash provided by (used in) operating activities       1,662       (6,655)         682
                                                                   -------      -------      -------
Cash flows from investment activities:
   Capital expenditures ......................................      (3,511)      (2,542)      (2,494)
   Acquisitions ..............................................        (419)          --           --
   Umbro license acquisition fee .............................          --           --         (500)
   Other investments .........................................        (228)        (686)      (1,485)
                                                                   -------      -------      -------
           Net cash used in investing activities .............      (4,158)      (3,228)      (4,479)
                                                                   -------      -------      -------
Cash flows from financing activities:
   Net borrowings under line-of-credit agreement .............       2,822        9,197        4,400
   Debt issue costs ..........................................          --         (566)          --
   Proceeds from issuance of common stock ....................         277           13          138
                                                                   -------      -------      -------
         Net cash provided by financing activities ...........       3,099        8,644        4,538
                                                                   -------      -------      -------
Net increase (decrease) in cash ..............................         603       (1,239)         741
Cash, beginning ..............................................         513        1,752        1,011
                                                                   -------      -------      -------
Cash, ending .................................................      $1,116         $513        $1752
                                                                   =======      =======      =======
</TABLE>


                 See notes to consolidated financial statements

                                       F-6


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

         PRINCIPLES OF CONSOLIDATION: The consolidated financial statements
include the accounts of Riddell Sports Inc. and its wholly-owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated.

         BUSINESS: Riddell markets and manufactures products and services for
the extracurricular portion of the educational market. The Company owns or
licenses leading brands, such as Riddell(R), Varsity Spirit(R), Umbro(R) and
MacGregor(R) for products and services for team sports and school spirit
activities. Riddell markets its products and services to schools and
recreational organizations and the coaches and participants in the
extracurricular market through its own nationwide sales force, a web site
targeted to specific activities and a year-round marketing cycle of special
events, competitions and instruction.

         INVENTORIES: Inventories are stated at the lower of cost (determined on
a first-in, first-out basis) or market and include material, labor and factory
overhead.

         PROPERTY AND EQUIPMENT: Property and equipment are stated at cost.
Depreciation is being computed using the straight-line method over the estimated
useful lives (principally 30 years for buildings and improvements, except for
leasehold improvements depreciated over the lessor of the lease term or their
useful life, and 3 to 7 years for machinery and equipment) of the related
assets.

         INTANGIBLE ASSETS AND DEFERRED CHARGES: Debt issue costs are amortized
to interest expense over the term of the related debt. Other intangibles and
deferred charges are being amortized by the straight- line method over their
respective estimated lives.

         Long-lived assets, including goodwill and other intangible assets, are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. For purposes of
evaluating the recoverability of long-lived assets, the related assets' carrying
value is compared to the undiscounted estimated future cash flows from the
related operations.

         INCOME TAXES: Deferred tax liabilities and assets are recognized for
the expected future tax consequences of events that have been included in the
financial statements or tax returns. Deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities (excluding non-deductible goodwill) using enacted tax
rates in effect for the years in which the differences are expected to become
recoverable or payable.

         REVENUES: Sales of products and reconditioning are recorded upon
shipment to customers. Camp and event revenues are recognized over the term of
the respective activity. Royalty income is generally recorded by Riddell when
earned, based upon contracts with licensees. These contracts provide for
royalties based upon the licensee's sales or purchases of covered products,
subject to periodic minimum amounts of royalties.

         ESTIMATES: In preparing financial statements in conformity with
accounting principles generally accepted in the United States of America,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses for the periods

                                       F-7


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

reported. Actual results could differ from those estimates. Estimates relating
to contingent liabilities are further discussed in Note 9.

         CONCENTRATION OF CREDIT RISK: The majority of Riddell's receivables
arise from sales to schools and other institutions. Riddell maintains reserves
for potential losses on receivables from these institutions, as well as
receivables from other customers, and such losses have generally not exceeded
management's expectations.

         EARNINGS (LOSS) PER SHARE: Basic earnings (loss) per share amounts have
been computed by dividing earnings (loss) by the weighted average number of
outstanding common shares. Diluted earnings (loss) per share is computed
dividing earnings (loss) by the weighted average number of common shares and
common equivalent shares relating to dilutive securities. The following table
shows a reconciliation of this denominator:

<TABLE>
<CAPTION>
                                                                       YEARS ENDED DECEMBER 31,
                                                            -------------------------------------------
                                                                2000            1999           1998
                                                            ------------    -----------     -----------
                                                                            (IN THOUSANDS)
<S>                                                                <C>            <C>             <C>
         Weighted average number of outstanding
            common shares...................................       9,389          9,260           9,134
         Options, assumed exercise of dilutive options,
            net of treasury shares which could have
            been purchased from the proceeds of
            the assumed exercise based on
            average market prices...........................          82             --              --
                                                            ------------    -----------     -----------
                  Denominator for diluted computation.......       9,471          9,260           9,134
                                                            ============    ===========     ===========
</TABLE>

         For the year ended December 31, 2000, options to purchase 1,960,450
shares of common stock with a weighted average price of $4.66 and the
convertible debt described in Note 6 were excluded from the computation of
diluted earnings per share, as their inclusion would not have been dilutive. For
the years ended December 31, 1999 and 1998, potentially dilutive securities,
which include convertible debt, common stock options and warrants, were not
dilutive due to the net losses incurred and were excluded from the computation
of diluted earnings per share.

         SHIPPING AND HANDLING FEES: In September 2000, the Emerging Issues Task
force ("EITF") reached a consensus with respect to EITF Issue 00-10, "Accounting
for Shipping and Handling Fees and Costs." The purpose of this issue discussion
was to clarify the classification of shipping and handling revenue and costs.
The consensus reached was that all shipping and handling amounts billed to
customers should be classified as revenue. Additionally, a consensus was reached
that the classification of shipping and handling costs is an accounting policy
decision that should be disclosed pursuant to Accounting Principles Board
Opinion No. 22, "Disclosures of Amounting Policies." The Company may adopt a
policy of including shipping and handling costs in cost of sales or in operating
expenses . If shipping costs are material and are not included in costs of
sales, disclosure of both the amount of such costs and the line item on the
income statement is required.

The Company has adopted EITF issue 00-10 and billings to customers for freight
and handling charges are generally included in net sales and cost of goods sold
in the Consolidated Statements of Operations for all periods presented.

                                       F-8


<PAGE>

                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.       RECEIVABLES

         Accounts receivable include unbilled shipments of approximately
$972,000 and $1,315,000 at December 31, 2000 and 1999. It is Riddell's policy to
record revenues when the related goods have been shipped. Unbilled shipments
represent receivables for shipments that have not yet been invoiced. These
amounts relate principally to partial shipments to customers, who are not
invoiced until their order is shipped in its entirety or customers with orders
containing other terms that require a deferral in the issuance of an invoice.
Management believes that substantially all of these unbilled receivables will be
invoiced within the current sales season.

3.       INVENTORIES:

         Inventories consist of the following:

                                               DECEMBER 31,
                                       ---------------------------
                                          2000           1999
                                       -----------    ------------
                                             (IN THOUSANDS)

                  Finished goods           $18,591         $20,459
                  Work-in-process            3,974           3,088
                  Raw materials             10,242           9,841
                                       -----------    ------------
                                           $32,807         $33,388
                                       ===========    ============

4.       PROPERTY AND EQUIPMENT:

         Property and equipment consist of the following:

                                              DECEMBER 31,

                                           2000          1999
                                       -----------    ------------
                                            (IN THOUSANDS)

         Land                                 $207            $207
         Building and improvements           1,694           1,527
         Machinery and equipment            19,254          15,760
                                       -----------    ------------
                                            21,155          17,494
         Less accumulated depreciation      12,612           9,723
                                       -----------    ------------
                                            $8,543          $7,771
                                       ===========    ============

         Depreciation expense relating to all property and equipment amounted to
$2,889,000, $2,642,000 and $2,446,000 for the years ended December 31, 2000,
1999, and 1998, respectively.

                                       F-9


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


5.       INTANGIBLE ASSETS AND DEFERRED CHARGES:

         Intangible assets and deferred charges consist of the following:

                                         ESTIMATED       DECEMBER 31,
                                          LIVES    ---------------------------
                                         IN YEARS    2000             1999
                                         --------  -----------    ------------
                                                        (IN THOUSANDS)

         MacGregor trademark rights         40         $18,040         $18,040
         Trademarks                         40           3,250           3,250
         Goodwill                        20 to 40       92,664          92,110
         Debt issue costs                    8           7,547           7,547
         Other                            7 to 10        2,898           2,898
                                                   -----------    ------------
                                                       124,399         123,845
         Less accumulated amortization                  22,011          17,893
                                                   -----------    ------------
                                                      $102,388        $105,952
                                                   ===========    ============

         Amortization expense relating to all intangible assets and deferred
charges amounted to $4,118,000, $4,035,000 and $4,070,000 for the years ended
December 31, 2000, 1999 and 1998, respectively.

6.       LONG-TERM DEBT:

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    -----------------------
                                                                        2000        1999
                                                                    ----------   ----------
                                                                        (IN THOUSANDS)

<S>                                                                   <C>          <C>
Outstanding balance under a credit facility  expiring in 2003,        $ 16,419     $ 13,597
  the facility was revised in 1999, terms further described below


Senior notes, 10.5%, due 2007, terms further described below           115,000      115,000

Convertible subordinated note payable, interest at 4.1%,                 7,500        7,500
  due 2002 through 2004, terms further described below
                                                                    ----------   ----------
                                                                      $138,919     $136,097
                                                                    ==========   ==========
</TABLE>

The aggregate maturities of long-term debt are as follows:

                   YEARS ENDING DECEMBER 31,                     (IN THOUSANDS)
                          2002                                        $  1,875
                          2003                                          18,294
                          2004                                           3,750
                          2007                                         115,000
                                                                    ----------
                                                                      $138.919
                                                                    ==========

                                      F-10


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

         In April 1999, Riddell entered into a revised credit facility with Bank
of America National Trust and Savings  Association.  The revised credit facility
replaced  Riddell's $35 million credit facility with NationsBank (now named Bank
of  America ) and NBD  Bank,  which  subsequently  became a  participant  in the
revised facility.  The revised credit facility consists of a line of credit in a
principal  amount not to exceed $48  million,  expiring  at the end of  December
2003.  Draws under the line of credit are limited to a  percentage  of Riddell's
eligible receivables and inventory, as defined by the credit facility agreement.
The outstanding  balance of the line accrues  interest at a rate of LIBOR plus a
margin of 2.25% on draws so  designated  by  Riddell,  payable at the end of the
applicable  interest period, but not less frequently than quarterly and on other
draws at the  higher  of the  bank's  prime  rate  plus a margin of 0.75% or the
Federal Funds rate plus 1.25%,  payable monthly.  The credit facility also calls
for an unused line fee equal to an annual  rate of 0.375%  applied to the amount
by which the lesser of $40 million and the then maximum revolving amount exceeds
the average daily balance of outstanding borrowings under the line. The bank can
adjust the margin of interest rate over the related notes on a quarterly  basis,
dependant on certain financial ratios. The interest rate margin can vary between
1.75% and 2.75%  over  LIBOR,  0.25% to 1.25%  over the prime rate and 0.75% and
1.75% over the  Federal  Funds  rate.  The credit  facility  agreement  contains
covenants which,  among other things,  require Riddell to meet certain financial
ratio and net worth tests, restrict the level of additional indebtedness Riddell
may incur,  limit  payments of dividends,  restrict the sale of assets and limit
investments Riddell may make. The credit facility also requires repayment of the
principal amount upon the occurrence of a change in the control,  as defined, of
Riddell.  Riddell  has  pledged  essentially  all  of  its  tangible  assets  as
collateral for the credit facility.

         The 10.5% senior notes  contain  covenants  that,  among other  things,
restrict  the level of other  indebtedness  Riddell  may incur,  the  amounts of
investments  it may make in other  businesses,  the  sale of  assets  and use of
proceeds therefrom and the payment of dividends.  The senior notes also restrict
payment of junior indebtedness prior to the maturity of the junior indebtedness.
The full face value of the senior notes are due on July 15,  2007.  The interest
on the  senior  notes is  payable  semiannually  on  January 15 and July 15. The
holders of the senior  notes  have the right to require  the senior  notes to be
redeemed at 101% of the principal amount in the event of a change of control (as
defined in the senior notes). The senior notes contain  prepayment  restrictions
and have no mandatory redemption provisions.  The senior notes are guaranteed by
all of  Riddell's  subsidiaries.  Each of these  subsidiaries  are  wholly-owned
subsidiaries of Riddell and have fully and unconditionally guaranteed the senior
notes on a joint and several basis.  Riddell itself is a holding company with no
assets or  operations  other  than  those  relating  to its  investments  in its
subsidiaries. The separate financial statements of the guaranteeing subsidiaries
are not presented in this report  because,  considering  the facts stated above,
the  separate  financial   statements  and  other  disclosures   concerning  the
guaranteeing subsidiaries are not deemed material to investors by management.

         The 4.1%  convertible  subordinated  note is  subordinated  in right to
prior payment in full of senior indebtedness,  which is generally defined in the
governing  agreements to include debt under the senior notes and revolving  line
of credit described above and any refinancing, renewal or replacement thereof as
well  as  certain  other  debt.  Repayments  of 25%  and  33-1/3%  of  the  then
outstanding principal balance is due on November 1, 2002 and 2003, respectively,
with  the  remaining   balance  due  November  1,  2004.   Interest  is  payable
semiannually  each May 1 and  November 1. The note limits  Riddell's  ability to
grant stock options and requires  repayment of 101% of the  principal  amount in
the event of a change in control  (as  defined).  The note is  convertible  into
shares of common stock based on a conversion price of $5.3763 per share.

                                      F-11


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.       STOCKHOLDERS' EQUITY AND STOCK OPTION PLANS:

                STOCK OPTION PLANS: The 1991 Stock Option Plan, as amended,  and
the 1997 Stock Option Plan provide for the granting of options to key employees,
directors,  advisors and independent  consultants to Riddell for the purchase of
up to an aggregate of 2,915,500 shares of Riddell's common stock. Under the 1991
Stock Option Plan,  options for an aggregate of 1,415,500  shares may be granted
at an option price of no less than 85% of the market  price of Riddell's  common
stock on the date of grant and may be exercisable between one and ten years from
the  date of  grant.  Under  the  1997  Stock  Option  Plan,  options  or  other
stock-based awards may be granted for an aggregate of 1,500,000 shares. The 1997
Stock Option Plan  generally  does not  restrict the exercise  price or terms of
grants.

         During  2000  and  1998,  Riddell  issued  54,000  and  81,000  shares,
respectively,   of  its  common  stock  to  certain   employees   for  incentive
compensation  as a stock  award under the terms of the 1997 Stock  Option  Plan.
These shares were  recorded at a value of $169,000 for the shares issued in 2000
and $328,000 for the shares issued in 1998, based on quoted market values at the
date of grant.  The shares  issued in 2000 and  27,000 of the  shares  issued in
1998,  valued  at  $128,000,  were  granted  in  satisfaction  of  accruals  for
compensation  included in accrued  liabilities  at  December  31, 1999 and 1997,
respectively.

         Options granted through  December 31, generally have been designated as
non-qualified stock options and have had option prices equal to market values on
the date of grant,  except for options for 450,000  shares  issued in connection
with  the  acquisition  of  Varsity  Spirit   Corporation  in  1997  which  were
in-the-money on the measurement date of the grant, have had terms of five or ten
years, and have had vesting periods of one or four years.  Information  relating
to stock option transactions over the past three years is summarized as follows:

<TABLE>
<CAPTION>
                                               Options Outstanding           Options Exercisable
                                            ----------------------------   --------------------------
                                                              Weighted                     Weighted
                                                              Average                       Average
                                               Number         Price per        Number      Price per
                                             Outstanding        Share       Exercisable      Share
                                            -------------    -----------    -----------   -----------

<S>                                          <C>                <C>          <C>              <C>
       Balance, January 1, 1998                 2,157,975       $4.05        1,284,425        $3.37
         Granted                                  461,600       $5.08
         Exercised                                (58,825)      $2.48
         Forfeited                               (291,925)      $3.59
         Expired                                  (16,300)      $4.05
                                            -------------
       Balance, December 31, 1998               2,252,525       $4.36        1,362,106        $3.81
         Granted                                  364,000       $3.27
         Exercised                                 (5,000)      $2.44
         Forfeited                                (64,000)      $2.80
         Expired                                 (101,500)      $2.87
                                            -------------
       Balance, December 31, 1999               2,446,025       $4.30        1,519,513        $4.22
         Granted                                  285,500       $3.85
         Exercised                               (134,270)      $2.02
         Forfeited                               (106,325)      $5.19
         Expired                                   (8,480)      $3.38
                                            -------------
       Balance, December 31, 2000               2,482,450       $4.34        1,729,988        $4.44
                                            =============
</TABLE>


                                      F-12


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

         Options forfeited in 1999 include options for 60,000 shares surrendered
by four members of the board of directors in exchange for a cash  payment.  Each
of the four  directors  received  a  payment  of  $16,875  in  exchange  for the
surrender of stock options granted to them in 1994 for 15,000 shares each, at an
exercise  price of $2.625.  The payment was computed based on the "in the money"
value of the options at the time of the payments.

         Options  granted in 1998 include grants for 56,600  shares,  granted in
November 1998, to certain employees (none of which were directors of Riddell) in
exchange for cancellation of options for 69,850 shares which had previously been
granted to these  employees.  The  canceled  options,  which are included in the
forfeited category above, would have expired in December 1998 and had a weighted
average option price of $2.44 per share.  The new grants had a term of ten years
and a weighted average option price of $3.76 per share.

Further  information  about  stock  options  outstanding at December 31, 2000 is
summarized as follows:

<TABLE>
<CAPTION>
                                   OPTIONS OUTSTANDING                  OPTIONS EXERCISABLE
                         ----------------------------------------     -----------------------
                                           Weighted      Weighted                    Weighted
                                            Average       Average                    Average
          Range of          Number         Remaining     Price Per      Number      Price Per
       Exercise Prices   Outstanding   Contractual Life    Share      Exercisable     Share
       ---------------   -----------   ----------------  --------     ------------  ----------
<S>                        <C>            <C>               <C>            <C>           <C>
        $3.00 - $4.49      1,341,600      6.4  years        $3.58          940,475       $3.76
        $4.50 - $6.50      1,140,850      6.9  years        $5.24          789,513       $5.26
</TABLE>

         At  December  31, 2000 there were 74,955  shares  available  for future
option grants.

         In accordance with the provisions of Statement of Financial  Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS 123), Riddell
has  elected to  continue to account  for stock-  based  compensation  under the
intrinsic value based method of accounting  prescribed by Accounting  Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25). Under
APB 25,  generally,  no cost is recorded for stock options  issued to employees,
unless the option price is below  market at the time  options are  granted.  The
following  pro forma net  income  and  earnings  per  share  are  presented  for
informational  purposes  and have been  computed  using the fair value method of
accounting for stock-based compensation as set forth in SFAS 123:

<TABLE>
<CAPTION>
                                                         YEARS ENDED DECEMBER 31,
                                                 -------------------------------------
                                                    2000          1999          1998
                                                 ----------    ----------    ---------
                                                 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                                                   <C>         <C>          <C>
         Pro forma net (loss)                         ($294)      ($1,725)     ($7,953)
         Pro forma net (loss) per share,
            basic and diluted                        ($0.03)       ($0.19)      ($0.87)
</TABLE>

         The pro forma  results  include  expense  related  to the fair value of
stock  options  estimated  at the date of grant using the  Black-Scholes  option
pricing model and the following weighted average assumptions for the years ended
December 31, 2000,  1999 and 1998,  respectively:  risk-free  interest  rates of
6.1%, 5.7% and 5.3% ; expected  volatility of 50%, 50% and 56%;  expected option
life of 7 years and no dividend  payments.  The weighted average  estimated fair
value of options granted during 2000,  1999 and 1998 was $2.29,  $1.92 and $3.16
per share, respectively.

                                      F-13


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



         WARRANTS:  During  1999  warrants  held  by  one of  Riddell's  lenders
expired.  The warrant was for 172,152 shares of Riddell's  common stock at $3.72
per share.

         During  1998  certain  officers  and  directors  of  Riddell  exercised
outstanding  warrants  for shares of  Riddell's  common  stock  which would have
expired in January 1999.  Riddell agreed to a cashless exercise of the warrants,
in effect  accepting  shares issuable upon exercise as payment for the exercise.
As a result,  42,362 shares of common stock were issued in exchange for warrants
for 150,000 shares based on an exercise price of $2.96 per share and an exchange
price of $4.125 per share.  The exchange  price of $4.125 per share was set on a
date when the quoted market price of a share of common stock was $4.00.

8.       COMMITMENTS:

         LEASES: Riddell leases various facilities and equipment under operating
leases.  Rent  expense  amounted to  approximately  $4,154,000,  $3,105,000  and
$2,792,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

         Future minimum rental payments for all non-cancelable  lease agreements
for periods after December 31, 2000 are as follows:

                  YEARS ENDING DECEMBER 31,         (IN THOUSANDS)
                           2001                             4,289
                           2002                             4,371
                           2003                             3,827
                           2004                             3,223
                           2005                             2,708
                           Later years                     15,741
                                                        ---------
              Total minimum payments required            $ 34,159
                                                        =========


         EMPLOYEE BENEFITS:  Riddell has three  noncontributory  defined benefit
pension plans that cover, or have covered,  certain employee groups. These plans
consist  of two  plans  covering  certain  unionized  employees  and a plan that
covered non-union employees of one subsidiary. The non-union plan was amended in
1994 to  provide  that no  benefits  would  accrue  under  the  plan on or after
December 31, 1994. Expense for these plans was approximately  $63,000,  $60,000,
and $200,000 for the years ended December 31, 2000, 1999 and 1998.  Expenses for
1998 included a provision for costs  relating to an  anticipated  termination of
the non-union plan.

         Riddell   maintains   defined   contribution   (401-k)  plans  covering
substantially all of its employees, other than those covered by the union plans.
Company  contributions  to these  plans are based on a  percentage  of  employee
contributions  and are funded and  charged  to  expense  as  incurred.  Expenses
related to the plans  amounted to  $194,000,  $122,000 and $95,000 for the years
ended December 31, 2000, 1999 and 1998, respectively.

                                      F-14


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.       ACCRUED LIABILITIES AND CONTINGENCIES:

         RECORDED LIABILITIES: In regards to the product liability contingencies
discussed below, Riddell has recorded certain  liabilities.  While these amounts
are discussed in the remaining sections of this note, a summary of these amounts
together  with other  items  comprising  the balance  sheet line items  "accrued
liabilities" and "other liabilities" follows:

<TABLE>
<CAPTION>
                                                                 ACCRUED
                                                               LIABILITIES  OTHER LIABILITIES
                                                                (CURRENT)     (NON-CURRENT)
                                                                ---------      -----------
                                                                      (IN THOUSANDS)
<S>                                                            <C>              <C>
    December 31, 2000:
      Product liability matters, reserves for
        pending and other contingencies                          $   1,000           $ 3,000
      Accrued interest                                               5,677                --
      Other accrued liabilities                                      4,209                40
                                                               -----------      ------------
             Total of balance sheet category                      $ 10,886           $ 3,040
                                                               ===========      ============

    December 31, 1999:                                                (IN THOUSANDS)
      Product liability matters, reserves for
        pending and other contingencies                           $    700           $ 3,000
      Accrued interest                                               5,648                --
      Other accrued liabilities                                      5,435               107
                                                               -----------      ------------
             Total of balance sheet category                      $ 11,783           $ 3,107
                                                               ===========      ============
</TABLE>


         PRODUCT LIABILITY LITIGATION MATTERS AND CONTINGENCIES:

         At December  31, 2000,  Riddell was a defendant in 9 product  liability
suits  relating to  personal  injuries  allegedly  related to the use of helmets
manufactured or reconditioned  by subsidiaries of Riddell.  The ultimate outcome
of these claims,  or potential  future claims,  cannot  presently be determined.
Riddell  estimates  that the  uninsured  portion  of future  costs and  expenses
related to these claims, and incurred but not reported claims, will amount to at
least $4,000,000 and,  accordingly,  a reserve in this amount is included in the
Consolidated  Balance Sheet at December 31, 2000 as part of accrued  liabilities
and other  liabilities.  These  reserves  are based on  estimates  of losses and
defense  costs  anticipated  to result from such claims,  from within a range of
potential  outcomes,  based on available  information,  including an analysis of
historical  data such as the rate of occurrence  and the  settlement  amounts of
past cases.  However,  due to the  uncertainty  involved with  estimates  actual
results have at times varied  substantially  from earlier estimates and could do
so in the future.  Accordingly there can be no assurance that the ultimate costs
of such claims will fall within the established reserves.

         Riddell maintains  product liability  insurance under a policy expiring
in January 2005. The policy is an  occurrence-based  policy  providing  coverage
against claims  currently  pending against Riddell and future claims relating to
all injuries occurring prior to January 2005 even if such claims are filed after
the end of the policy period.  The insurance  program provides certain basic and
excess coverage on product liability claims with a combined  aggregate  coverage
of over $40,000,000 subject to the limitations described below.

                                      F-15


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

         The  first  level  of  insurance  coverage  under  the  policy  ("Basic
Coverage")  provides  coverage  of up to  $2,250,000  per  claim in excess of an
uninsured retention (deductible) of $750,000 per occurrence.  The Basic Coverage
is subject to an  aggregate  program  limit and  certain  annual  aggregate  sub
limits. The Basic Coverage, which does not affect the availability of the excess
coverage  described  below,  has an  aggregate  limit  which is  currently  $6.3
million,  but the policy  allows  Riddell to increase this maximum limit to $7.7
million at any time by prepaying the required  premium,  which counts at 120% of
the amount paid toward the limit. The Basic Coverage,  to the extent  available,
covers the insured  portion of the first  $3,000,000  of a claim.  The insurance
program also  provides for  additional  coverage  ("Excess  Coverage")  of up to
$20,000,000  per  occurrence,  in excess of the first  $3,000,000 of each claim.
Claims  covered  by the  Excess  Coverage  are  subject  to one of two  separate
$20,000,000  aggregate  policy  limits,  depending  on the  date of the  related
injury.  The first  $20,000,000  aggregate  limit applies to claims for injuries
occurring prior to January 31, 1998, and claims occurring after January 1998 are
covered by the second separate  $20,000,000  aggregate  limit.  Should either of
these $20,000,000  aggregate limits become exhausted or impaired,  in full or in
part, the policy  provides that Riddell can reinstate the affected limit back to
a full $20,000,000  level upon payment of a reinstatement  premium.  Each of the
$20,000,000  aggregate limits may only be reinstated once and the  reinstatement
premium can vary from  $750,000  to  $2,500,000  depending  on the amount of the
reinstatement and which of the two aggregate limits is to be reinstated.

         In March 1999,  a jury  rendered a verdict  against  Riddell in a Texas
product  liability  lawsuit for  approximately  $11.4 million plus interest from
February  1996.  In February  2001,  the United  Stated Court of Appeals for the
Fifth  District  reversed this verdict.  Claims  relating to $9.9 million of the
verdict were remanded for a new trial and the  remaining  portion of the verdict
was  overturned.  Riddell does not know whether the plaintiff will seek to retry
the  case.  The  matter  is  covered  by the  insurance  described  in the above
paragraphs.

         OTHER CONTINGENCIES AND LITIGATION MATTERS:

         In addition  to the  matters  discussed  in the  preceding  paragraphs,
Riddell has certain other claims or potential  claims  against it that may arise
in the normal course of business, including without limitation,  claims relating
to personal injury as well as employment  related matters.  Management  believes
that the probable  resolution  of such matters  will not  materially  affect the
financial position or results of operations of Riddell.

10.      INCOME TAXES:

         Income taxes on income  (loss),  before  extraordinary  items,  for the
years ended December 31, 2000, 1999 and 1998 is summarized below:

<TABLE>
<CAPTION>
                                                    YEARS ENDED DECEMBER 31,
                                           ------------------------------------------
                                               2000          1999             1998
                                           -----------    -----------     -----------
<S>                                          <C>                 <C>          <C>
         Current tax expense:                           (IN THOUSANDS)
                  Federal                    $     100     $        --        $    --
                  State                            100              --             --
                                           -----------    ------------    -----------
                                                   200              --             --
                                           -----------    ------------    -----------
              Deferred tax expense:
                  Federal                         (100)            905             --
                  State                             --              --             --
                                           -----------    ------------    -----------
                                                  (100)            905             --
                                           -----------    ------------    -----------
                                             $     100           $ 905        $    --
                                           ===========    ============    ===========
</TABLE>



                                      F-16


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         Income tax  expense  for 2000  consisted  of a  provision  for  federal
alternative  minimum  tax,  with  an  offsetting  deferred  tax  benefit,  and a
provision  for  current  state  income  taxes.  Income tax  expense for 1999 was
$905,000  which  reflects an  adjustment  relating to the  valuation of deferred
taxes.  There was no other  current  income  tax  expense  for the  years  ended
December 31,  2000,  1999 and 1998 due to net  operating  losses  generated,  or
carried  forward to,  these  periods.  There was no other  deferred  tax expense
during  the  years  ended  December  31,  2000,  1999 and 1998  since  there was
generally a full valuation allowance applied to net deferred tax assets. Changes
in the valuation allowance were a decrease of $1,185,000 for 2000, a decrease of
$354,000 (net of the increase of $905,000  relating to the adjustment  described
above) for 1999, and an increase of $2,184,000 for 1998.

         Deferred  tax  assets  and  liabilities  are  determined  based  on the
differences  between  the  financial  reporting  and tax  bases  of  assets  and
liabilities.  The  significant  components  of  deferred  income  tax assets and
liabilities at December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                                 -----------------------
                                                                    2000         1999
                                                                 ---------     ---------
<S>                                                              <C>          <C>
         Deferred income tax assets:                                  (IN THOUSANDS)
              Accrued expenses and reserves                        $ 2,589       $ 3,190
              Inventory                                              1,165           983
              Net operating loss, and credit, carryforwards          3,965         4,812
              Other                                                    724           379
                                                                 ---------     ---------
                                                                     8,443         9,364
              Valuation allowances                                  (1,667)       (2,861)
                                                                 ---------     ---------
              Total deferred income tax assets                       6,776         6,503
                                                                 ---------     ---------
         Deferred income tax liabilities:
              Intangible assets and deductible goodwill              6,166         5,900
              Property and equipment                                   370           380
              Prepaid expenses                                         240           223
                                                                 ---------     ---------
              Total deferred income tax liabilities                  6,776         6,503
                                                                 ---------     ---------
         Total net deferred income tax asset                       $   -0-       $   -0-
                                                                 =========     =========
</TABLE>


         The net current and non-current components of the deferred income taxes
were recognized in the balance sheet at December 31, 2000 and 1999 as follows:

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                                 -----------------------
                                                                    2000          1999
                                                                 ---------     ---------
<S>                                                              <C>          <C>

         Net current deferred tax assets                            $2,270       $ 2,076
         Net non-current deferred tax liabilities                    2,270         2,076
                                                                 ---------     ---------
                                                                    $  -0-       $   -0-
                                                                 =========     =========
</TABLE>







                                      F-17

<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         Reconciliations  between the actual provision for income taxes and that
computed by applying the U.S.  statutory  rate to income (loss) before taxes are
as follows:

<TABLE>
<CAPTION>
                                                                     YEARS ENDED DECEMBER 31,
                                                             ----------------------------------------
                                                               2000             1999           1998
                                                             ----------    --------------     -------
                                                                           (IN THOUSANDS)
<S>                                                              <C>            <C>           <C>
         Tax expense (benefit) at U.S. statutory rate            $  225         $  104        ($2,427)
         Differences resulting from:
              State income tax, net
                  Of federal tax benefit                             70             --             --
              Amortization not deductible
                for tax purposes                                    720            721            727
              Travel & entertainment expenses
                not deductible for tax purposes                     330            269            276
              Increase in deferred tax valuation
                allowance from non-recognition of net
                operating loss tax benefit                           --             --          1,447
              Benefit of prior periods net operating
                losses not previously recognized resulting
                in decrease in valuation allowance               (1,242)        (1,095)            --
              Valuation allowance adjustment                         --            905             --
              Other differences                                      (3)             1            (23)
                                                             ----------    -----------     ----------
         Income tax expense                                      $  100        $   905        $   -0-
                                                             ==========    ===========     ==========
</TABLE>


         At  December  31,  2000  Riddell  had  estimated  net  operating   loss
carryforwards  for  federal  income tax  purposes of  approximately  $11,000,000
expiring  between  2008 to 2014.  While this loss  carryforward  is available to
reduce the payment of taxes that might otherwise be payable in future years, the
benefit  of  most  of the net  operating  losses  have  been  recognized  in the
computation of income tax expense reflected in Riddell's  consolidated financial
statements in prior years.  Benefits  relating to approximately  $1.5 million of
net operating loss carryforwards have not yet been recognized in the computation
of income tax expense for  financial  reporting  purposes and have been reserved
for as  part  of the  deferred  income  tax  asset  valuation  allowance.  These
unrecognized carryforwards would be recognized through a reduction of income tax
expense in future periods upon the generation of an offsetting amount of taxable
earnings.

11.      RELATED PARTY TRANSACTIONS:

         In 2000,  Riddell  entered  into a sublease  for  office  space from an
entity  controlled  by a stockholder  who is the Chairman of Riddell's  Board of
Directors,  on substantially the same terms as the over lease. The sublease runs
through September 2009 and provides for annual fixed rent of $116,970 increasing
to an  annualized  rate of $137,826 at the end of the lease term and  additional
rent based on a percentage of tax and operating expense escalation payments made
by the  sub-lessor to its landlord.  Total  payments to this entity for the year
ended  December 31, 2000 were  approximately  $330,000  which  included rents as
described   above,   Riddell's   share  of  utilities  and  costs  of  leasehold
improvements of approximately $190,000.

                                      F-18


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


12.      SUPPLEMENTAL CASH FLOW INFORMATION:

         Cash  payments  for  interest   were   $15,460,000,   $14,600,000   and
$14,700,000 for the years ended December 31, 2000, 1999 and 1998,  respectively.
Income tax payments, or refunds, were not significant for 2000, 1999 or 1998.

         During 2000 and 1998,  Riddell issued shares of its common stock valued
at $169,000 and $128,000, respectively, based on quoted market values a the time
of grant,  to certain  employees in  satisfaction  of accruals for  compensation
included in accrued liabilities at December 31, 1999, and 1997, respectively.

13.      FAIR VALUES OF FINANCIAL INSTRUMENTS:

         Riddell's  financial  instruments  include cash,  accounts  receivable,
accounts  payable and  long-term  debt.  The carrying  values of cash,  accounts
receivable  and  accounts  payable  approximate  their  fair  values.  Riddell's
long-term  debt  include  the senior  notes  which at  December  31,  2000 had a
carrying value of $115,000,000 and a fair value,  based on quoted market values,
of  $93,725,000.  Riddell's  remaining  long-term  debt is not traded and has no
quoted market value,  however  management  believes any  difference  between its
carrying  value  and fair  value  would not be  material  in  relation  to these
Consolidated Financial Statements.

14.      SEGMENT AND PRODUCT LINE INFORMATION:

         Riddell has three  reportable  segments:  extracurricular  products and
services, retail products and trademark licensing:

         Extracurricular  products and services:  This segment markets  products
and services primarily through Riddell's direct sales force for  extracurricular
customers such as schools, leagues,  recreational groups and other organizations
for competitive and recreational sport and school spirit activities.  Operations
include the  manufacture and sale of team sports  products  (including  football
protective  products  and team  uniforms),  school  spirit  products  (including
cheerleading  and  dance  uniforms  and  accessories),  and  athletic  equipment
reconditioning.  The segment  also  operates  cheerleader  and dance team camps,
clinics and special events. The extracurricular  segment includes Riddell's line
of  Umbro  branded  soccer  uniforms,  footwear  and  equipment  sold to  soccer
specialty stores.

         Retail products: This segment markets products through retailers.  Most
of the products sold by this segment are sports  collectible  products,  such as
authentic and replica football  helmets,  which bear licensed sports team logos.
The segment's operations also include sales of certain recreational football and
other   athletic   products  sold  through   consumer   product   retailers  and
distributors.

         Trademark  licensing:  This  segment  consists of the  licensing of the
Riddell and MacGregor  trademark  rights to other  entities for use in marketing
products such as athletic footwear and apparel.

         Riddell's  reportable segments are strategic business units that differ
and are managed  separately  because of the nature of their markets and channels
of distribution.  The extracurricular products and services segment includes the
company's  team sports  business  unit and its school spirit  (cheerleading  and
dance)

                                      F-19


<PAGE>

                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


business unit.  Information about these two business units has been combined and
reported as the  institutional  products and services  segment as the units have
similar  economic  and other  business  traits.  Riddell  has  determined  these
reportable  segments in accordance  with the  management  approach  specified in
Statement of Financial  Accounting  Standards (SFAS) No. 131,  "Disclosure About
Segments of an Enterprise  and Related  Information."  The  management  approach
designates  the  internal  organization  that is used by  management  for making
operating decisions and assessing  performance as the basis for determination of
the Company's reportable segments.

<TABLE>
<CAPTION>
                                                                    (IN THOUSANDS)
                                                    ------------------------------------------------
                                                               YEARS ENDED DECEMBER 31,
                                                        2000              1999               1998
                                                    -----------        ----------         ----------
<S>                                                    <C>             <C>                  <C>
NET REVENUES:
     Extracurricular products and services             $215,234          $189,430           $166,845
     Retail products                                     18,281            18,111             18,142
     Trademark licensing and other                        1,206             1,056              1,613
                                                    -----------        ----------         ----------
     Consolidated total                                $234,721          $208,597           $186,600
                                                    ===========        ==========         ==========

INCOME FROM OPERATIONS:
     Extracurricular products and services              $20,397           $18,487            $11,416
     Retail products                                      1,267             1,176                 56
     Trademark licensing                                    462               282                841
     Corporate and unallocated expenses                  (5,113)           (4,260)            (4,796)
                                                    -----------        ----------         ----------
     Consolidated total                                 $17,013           $15,685             $7,517
                                                    ===========        ==========         ==========

DEPRECIATION AND AMORTIZATION, EXCLUSIVE OF DEBT ISSUE COSTS:
     Extracurricular products and services               $4,854            $4,678             $4,497
     Retail products                                        579               582                557
     Trademark licensing                                    533               531                614
     Corporate and unallocated                              178                43                 45
                                                    -----------        ----------         ----------
     Consolidated total                                  $6,144            $5,834             $5,713
                                                    ===========        ==========         ==========

CAPITAL EXPENDITURES:
     Extracurricular products and services               $2,616            $2,079             $2,265
     Retail products                                        173               463                229
     Corporate and unallocated                              722               -                  -
                                                    -----------        ----------         ----------
     Consolidated total                                  $3,511            $2,542             $2,494
                                                    ===========        ==========         ==========

TOTAL ASSETS:
     Extracurricular products and services             $153,407          $155,202           $150,163
     Retail products                                     14,300            14,285             10,253
     Trademark licensing                                 15,222            15,880             16,898
     Corporate and unallocated                           10,888             8,969              8,897
                                                    -----------        ----------         ----------
     Consolidated total                                $193,817          $194,336           $186,211
                                                    ===========        ==========         ==========
</TABLE>


                                      F-20


<PAGE>


                      RIDDELL SPORTS INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



14.      SEGMENT AND PRODUCT LINE INFORMATION (CONTINUED):

<TABLE>
<CAPTION>
                                                                      (IN THOUSANDS)
                                                                 YEARS ENDED DECEMBER 31,
                                                        2000              1999               1998
                                                    -----------        ----------         ----------

REVENUES BY PRODUCT LINE FOR ALL  REPORTABLE  SEGMENTS IN THE AGGREGATE  WERE AS FOLLOWS:

<S>                                                     <C>               <C>                <C>
     Cheerleader and dance products                     $79,145           $69,155            $63,491
     Camps and events                                    56,856            51,130             48,704
     Team sports products                                54,510            46,733             34,276
     Athletic product reconditioning                     25,900            24,564             23,415
     Sports collectibles                                 17,104            15,959             15,101
     Trademark licensing                                  1,206             1,056              1,613
                                                    -----------        ----------         ----------

     Consolidated revenues                             $234,721          $208,597           $186,600
                                                    ===========        ==========         ==========
</TABLE>


15.  SUMMARIZED QUARTERLY DATA (UNAUDITED):

<TABLE>
<CAPTION>
                                             -----------------------------------------------------------------
                                                                     FISCAL QUARTER
                                              FIRST         SECOND         THIRD        FOURTH         TOTAL
                                             --------      --------      --------     ---------      ---------
                                                         (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                           <C>           <C>           <C>            <C>          <C>
Year ended December 31, 2000:
     Net revenues                             $39,280       $75,019       $88,180        $32,242      $234,721
     Gross profit                              15,635        31,552        35,687         11,057        93,931
     Net income (loss)                         (6,719)        6,441        10,092         (9,253)          561
     Basic earnings (loss) per share            (0.72)         0.69          1.07          (0.98)         0.06
     Diluted earnings (loss) per share          (0.72)         0.61          0.92          (0.98)         0.06

Year ended December 31, 1999:
     Net revenues                             $34,259       $65,526       $79,965        $28,847      $208,597
     Gross profit                              13,773        28,097        32,911         10,054        84,835
     Net income (loss)                         (6,357)        5,367         9,174         (8,783)         (599)
     Basic earnings (loss) per share            (0.69)         0.58          0.99          (0.95)        (0.06)
     Diluted earnings (loss) per share          (0.69)         0.51          0.86          (0.95)        (0.06)
</TABLE>

         Net income for the third  quarter of 1999 includes a charge of $905,000
to reflect an adjustment relating to the valuation of deferred taxes.

         Earnings (loss) per share were computed  independently  for each of the
quarters presented. The sum of the quarters may not equal the total year amount,
due to the impact of computing  average  quarterly  shares  outstanding for each
period.

                                      F-21


<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                                   ON SCHEDULE





Board of Directors
Riddell Sports Inc.



         In connection with our audit of the consolidated financial statements
of Riddell Sports Inc. and Subsidiaries referred to in our report dated February
20, 2001, which is included on page F-2 of this Form 10-K, we have also audited
Schedule II for each of the three years in the period ended December 31, 2000.
In our opinion, this schedule presents fairly, in all material respects, the
information required to be set forth therein.





                                                              GRANT THORNTON LLP


Chicago, Illinois
February 20, 2001

                                       S-1


<PAGE>



SCHEDULE II

                      RIDDELL SPORTS INC. AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
              Col. A                   Col. B                Col. C                   Col. D        Col. E
---------------------------------   -------------  -----------------------------  -------------  -------------
                                                            Additions
                                                   -----------------------------
                                                         (1)           (2)
                                                     Charged to     Charged to
                                      Balance At        Costs         Other                       Balance At
                                      Beginning          and         Accounts-                       End of
            Description               of Period       Expenses       Describe      Deductions       Period
---------------------------------   -------------  -------------  --------------  -----------    -------------
<S>                                        <C>          <C>              <C>          <C>             <C>

                                                                                       (a)
Year ended December 31, 1998
   Allowance for doubtful accounts           $824         $929             --            $451         $1,302

   Accrued product liability reserves (b)
     Current portion                         $665       $1,178           ($300)          $834           $709
     Long-term portion                      3,300           --             300             --          3,300


Year ended December 31, 1999
   Allowance for doubtful accounts         $1,302       $1,196             --            $635         $1,863

   Accrued product liability reserves (b)
     Current portion                         $709         $853            $300         $1,162           $700
     Long-term portion                      3,300           --            (300)            --          3,000

Year ended December 31, 2000
   Allowance for doubtful accounts         $1,863       $1,173             --          $1,789         $1,247

   Accrued product liability reserves (b)
     Current portion                         $700         $850             --            $550         $1,000
     Long-term portion                      3,000           --             --              --          3,000
</TABLE>

-----------
   Notes:  (a) Deductions  for the  allowance for doubtful  accounts  consist of
               accounts  written off net of  recoveries;  deductions for accrued
               product  liability  reserves  consist of  payments  of claims and
               related expenses.

           (b) The  current  portion of accrued  product  liability  reserves is
               included  within  the  line  item  accrued   liabilities  in  the
               consolidated  balance  sheet.  The  long-term  portion of accrued
               product liability reserves is included within the line item other
               liabilities in the consolidated balance sheet.

                                       S-2