SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)
|X|               QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE
                  SECURITIES EXCHANGE ACT OF 1934


For the fiscal quarterly period ended       March 29, 1997
                                      ---------------------------

                                       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 0-19873

                                BELL SPORTS CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                              36-3671789
--------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                              identification no.)

   15170 N. Hayden Rd. Suite 1, Scottsdale, Arizona             85260
--------------------------------------------------------------------------------
      (Address of principal executive offices)                (Zip Code)

                                 (602) 951-0033
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                       N/A
--------------------------------------------------------------------------------
         Former name, former address and former fiscal year, if changed
                               since last report.

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) Yes X No and (2) has been subject
to such filing requirements for the past 90 days. Yes  X   No    . 
                                                      ---    ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the last practicable date.

Common Stock, $.01 par value      May 7, 1997                     13,751,542
----------------------------      ------------------        ----------------
Class                             Date                      Number of shares
<PAGE>
                                BELL SPORTS CORP.
                               INDEX TO FORM 10-Q

                                     PART I
<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                        Number
<S>                                                                                                  <C>  <C>
Bell Sports Corp. and Subsidiaries Consolidated Balance Sheets
  as of March 29, 1997 and June 29, 1996                                                                   3

Bell Sports Corp. and Subsidiaries Consolidated Statements of Operations
  for the nine months and three months ended March 29, 1997
  and March 30, 1996                                                                                       4

Bell Sports Corp. and Subsidiaries Consolidated Condensed Statements of Cash Flows
  for the nine months ended March 29, 1997 and March 30, 1996                                              5

Notes to Consolidated Financial Statements                                                            6 - 11

Management's Discussion and Analysis of
  Financial Condition and Results of Operations                                                      12 - 16



                                     PART II

Items 1 to 6                                                                                              17

Signatures                                                                                                18
</TABLE>
                                       2
<PAGE>
PART 1.           Financial Information
Item 1.           Financial Statements

                       BELL SPORTS CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                          March 29,             June 29,
                                                                                            1997                  1996
                                                                                      ------------------    ----------------
                                                                                            (unaudited)
<S>                                                                                      <C>                  <C>          
ASSETS
------
Cash and cash equivalents                                                                $       26,755       $      23,140
Marketable securities                                                                                --               7,996
Accounts receivable                                                                              89,305              75,651
Inventories                                                                                      72,390              59,413
Other current assets                                                                             22,875              17,285
                                                                                      ------------------    ----------------
             Total current assets                                                               211,325             183,485

Property, plant and equipment                                                                    25,577              24,722
Goodwill                                                                                         56,962              71,245
Intangibles and other assets                                                                     15,912              19,183
                                                                                      ------------------    ----------------
              Total assets                                                                $     309,776       $     298,635
                                                                                      ==================    ================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable                                                                          $      12,282       $      11,797
Accrued expenses                                                                                 22,707              16,752
Accrued compensation and employee benefits                                                        3,182               4,392
Notes payable and current maturities of long-term
   debt and capital lease obligations                                                             2,843               1,070
                                                                                      ------------------    ----------------
              Total current liabilities                                                          41,014              34,011

Long-term debt and capital lease obligations                                                    150,346             124,501
Other liabilities                                                                                 4,152               4,082
                                                                                      ------------------    ----------------
              Total liabilities                                                                 195,512             162,594

Stockholders' equity:
Preferred stock; $.01 par value; authorized 1,000,000 shares, none issued 
Common stock; $.01 par value; authorized 25,000,000 shares, issued
   14,246,614 and 14,224,360 shares, respectively, outstanding 13,751,542
   and 13,700,960 shares, respectively                                                              142                 142
Additional paid-in capital                                                                      141,761             141,647
Unrealized holding losses on marketable securities                                                   --                (461)
Foreign currency translation adjustments                                                           (155)                 81
(Accumulated deficit) retained earnings                                                         (22,266)                149
                                                                                      ------------------    ----------------
                                                                                                119,482             141,558
Less-495,072 and 523,400 shares of common stock in treasury, at cost,
   respectively                                                                                  (5,218)             (5,517)
                                                                                      ------------------    ----------------
             Total stockholders' equity                                                         114,264             136,041
                                                                                      ------------------    ----------------
             Total liabilities and stockholders' equity                                    $    309,776       $     298,635
                                                                                      ==================    ================
</TABLE>
                  See accompanying notes to these consolidated
                             financial statements.
                                       3
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (unaudited; in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                Nine Months Ended              Three Months Ended
                                                                -----------------              ------------------
                                                            March 29,         March 30,         March 29,      March 30,
                                                              1997              1996              1997           1996
                                                      ----------------   ---------------   ---------------  -------------

<S>                                                      <C>               <C>               <C>             <C>        
Net sales                                                $    189,267      $    181,331      $     70,575    $    67,442
Cost of sales                                                 135,037           142,838            49,862         47,526
                                                      ----------------   ---------------   ---------------  -------------

    Gross profit                                               54,230            38,493            20,713         19,916

Selling, general and administrative expenses                   45,342            47,428            15,417         17,069
Loss on disposal of product line                               25,360                --            25,360             --
Amortization of goodwill and intangible assets                  2,592             1,915               864            736
Restructuring charges                                           4,142             1,894             2,675            836
Net investment income                                          (2,610)           (2,419)             (323)          (455)
Interest expense                                                5,467             6,636             1,943          2,308
                                                      ----------------   ---------------   ---------------  -------------

Loss before income taxes                                      (26,063)          (16,961)          (25,223)          (578)
Benefit from income taxes                                      (3,649)           (4,579)           (3,280)        (1,291)
                                                      ----------------   ---------------   ---------------  -------------

Net (loss) income                                        $    (22,414)     $    (12,382)     $    (21,943)   $       713
                                                      ================   ===============   ===============  =============

Net (loss) income per common and common equivalent
share                                                    $     (1.63)      $      (0.90)     $      (1.59)   $      0.05
                                                      ================   ===============   ===============  =============


Weighted average number of common and
  common equivalent shares outstanding                         13,764            13,764            13,774         13,645
                                                      ================   ===============   ===============  =============
</TABLE>
                         See accompanying notes to these
                       consolidated financial statements.
                                       4
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (unaudited; in thousands)
<TABLE>
<CAPTION>
                                                                                              Nine Months Ended
                                                                                              -----------------
                                                                                         March 29,           March 30,
                                                                                           1997                1996
                                                                                     ----------------    ----------------
<S>                                                                                  <C>                 <C>             
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net cash used in operating activities                                                $       (26,568)    $       (49,443)
                                                                                     ----------------    ----------------

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
  Capital expenditures                                                                        (5,768)             (5,641)
  Net sale of marketable securities                                                            8,105              24,897
  Acquisition of other businesses                                                               (519)            (16,789)
                                                                                     ----------------    ----------------
Net cash provided by investing activities                                                      1,818               2,467
                                                                                     ----------------    ----------------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
  Proceeds from issuance of stock                                                                  -                  79
  Treasury stock purchases                                                                         -              (5,517)
  Payments on notes payable, long-term debt and capital leases                                   831                 825
  Advances taken on credit lines                                                              50,143              87,044
  Payments made on credit lines                                                              (22,540)            (87,700)
                                                                                     ----------------    ----------------
Net cash provided by (used in) financing activities                                           28,434              (5,269)
                                                                                     ----------------    ----------------

Effect of exchange rate changes on cash                                                          (69)               (105)
                                                                                     ----------------    ----------------

Net increase (decrease) in cash and cash equivalents                                           3,615             (52,350)
Cash and cash equivalents at beginning of period                                              23,140              72,018
                                                                                     ----------------   -----------------
Cash and cash equivalents at end of period                                             $      26,755    $         19,668
                                                                                     ================   =================
</TABLE>
                  See accompanying notes to these consolidated
                             financial statements.
                                       5
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES

Bell  Sports  Corp.  and  its  wholly-owned  subsidiaries   (collectively,   the
"Company") design, manufacture and market bicycle helmets, related bicycle parts
and accessories and automotive racing helmets.

Consolidation
-------------

The consolidated  financial statements include the accounts of Bell Sports Corp.
and its wholly-owned  subsidiaries.  All material intercompany  transactions and
balances have been eliminated in consolidation.

Accounting Period
-----------------

The Company's  fiscal year is either a fifty-two or fifty-three  week accounting
period ending on the Saturday that is nearest to the last day of June.

Unaudited Information and Basis of Presentation
-----------------------------------------------

The consolidated balance sheet as of March 29, 1997 and statements of operations
and condensed cash flows for all periods included in the accompanying  financial
statements have not been audited.  In the opinion of management  these financial
statements  include all normal and  recurring  adjustments  necessary for a fair
presentation  of such financial  information.  The results of operations for the
interim periods are not  necessarily  indicative of the results of operations to
be expected for the full year.

The financial  information  included  herein has been  prepared  pursuant to the
rules  and  regulations  of the  Securities  and  Exchange  Commission.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
omitted  pursuant  to  such  rules  and  regulations.   The  interim   financial
information and the notes thereto should be read in conjunction with the audited
financial  statements for the fiscal years ended June 29, 1996, July 1, 1995 and
July 2,  1994  which  are  included  in the  Company's  1996  annual  report  to
stockholders.

Income Per Share Information
----------------------------

Income per common and common  equivalent  share is computed  using the  weighted
average number of common stock and common stock  equivalent  shares  outstanding
during the  periods,  using the  treasury  stock  method for stock  options  and
warrants.  Common  equivalent  shares are excluded from the computation if their
effect is anti-dilutive  except that,  pursuant to Staff Accounting Bulletin No.
83 of the  Securities and Exchange  Commission,  certain stock options that were
granted at prices  below the initial  public  offering  price  during the twelve
month period immediately  preceding the April 1992 initial public stock offering
have been treated as common stock equivalents for all periods  presented.  Fully
diluted net income per common share for all periods included in the accompanying
financial  statements has not been presented since an assumed  conversion (using
the if converted  method,  which  includes the adjustment of reported net income
for interest charges on a net-of-tax  basis) of the Company's 4 1/4% convertible
debentures (see Note 4) would be anti-dilutive.
                                       6
<PAGE>
Marketable Securities
---------------------

All marketable  securities,  consisting of preferred equity  securities and U.S.
Government  Agency  instruments  have  been  classified  as   available-for-sale
securities  and are  reported at fair value with  unrealized  holding  gains and
losses  reported  in  stockholders'  equity.  The fair  value of the  marketable
securities  was obtained from  published  market quotes or outside  professional
pricing sources. The cost of the Company's  marketable  securities available for
sale exceeded the fair market value of such securities by approximately $461,000
at June 29,  1996.  Such excess was  recorded as a  reduction  to the  Company's
stockholders' equity at June 29, 1996.

During the first  quarter of fiscal  1997,  the  Company  was  successful  in an
arbitration case related to the handling of certain marketable  securities by an
outside investment advisor. The settlement proceeds, net of related expenses and
expected losses to sell certain securities in the net amount of $1.3 million, is
included in net investment income.

Accounts Receivable
-------------------

Accounts  receivable  at March 29, 1997 and June 29, 1996 are net of  allowances
for doubtful accounts of $5.5 million and $3.4 million, respectively.

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

Property,  plant and  equipment  at March 29,  1997 and June 29, 1996 are net of
accumulated depreciation of $16.8 million and $14.1 million, respectively.

NOTE 2 - INVENTORIES

Inventories consist of the following:


                                         March 29,           June 29,
(in thousands)                              1997               1996
                                            ----               ----

Raw materials                             $    7,684         $    5,330
Work in process                                2,394              2,315
Finished goods                                62,312             51,768
                                        -------------       ------------

                                           $  72,390          $  59,413
                                        =============       ============
                                       7
<PAGE>
NOTE 3 - PRODUCT LIABILITY AND CONTINGENCIES

Product Liability
-----------------

The Company is subject to various product  liability claims and/or suits brought
against  it for  claims  involving  damages  for  personal  injuries  or deaths.
Allegedly,  these  injuries or deaths relate to the use by claimants of products
manufactured  by the Company and, in certain  cases,  products  manufactured  by
others.  The ultimate  outcome of these existing claims and any potential future
claims  cannot  presently be  determined.  Other than for the February 1996 case
described   below,   management   believes  that  existing   product   liability
claims/suits are defensible and that, based on the Company's past experience and
assessment of current  claims,  the aggregate of defense costs and any uninsured
losses will not have a material  adverse  impact on the  Company's  liquidity or
financial position.

The cost of product liability insurance fluctuated greatly in past years and the
Company opted to self-insure  claims for certain  periods.  The Company has been
covered by product  liability  insurance  since July 1, 1991.  This insurance is
subject  to a  self-insured  retention.  There is no  assurance  that  insurance
coverage will be available or economical in the future.

The Company sold its motorcycle helmet manufacturing  business in June 1991 in a
transaction  in which the  purchaser  assumed  all  responsibility  for  product
liability  claims  arising  out of  helmets  manufactured  prior  to the date of
disposition  and the Company  agreed to use its in-house  defense team to defend
these  claims at the  purchaser's  expense.  If the  purchaser is for any reason
unable to pay any  judgment,  settlement  amount or defense costs arising out of
these  claims,  the Company  could be held  responsible  for the payment of such
amounts or costs.  The Company  believes that the  purchaser  does not currently
have the financial resources to pay any significant judgment, settlement amount,
or defense costs.

On February 2, 1996,  a Toronto,  Canada jury  returned a verdict  against  Bell
based on injuries arising out of a 1986 motorcycle accident. The jury found that
Bell was 25%  responsible  for the injuries  with the remaining 75% of the fault
assigned to the plaintiff and the other  defendant.  Unless  reversed on appeal,
the verdict is  estimated to be between $3.0 and $4.0  million,  which  includes
associated legal fees and tax implications.

The Company has filed an appeal of the  Canadian  verdict.  Although the Company
cannot predict the outcome of an appeal, the Company currently has adequate cash
balances and sources of capital  available to satisfy the judgment if the appeal
is unsuccessful.  Accordingly,  the Company currently does not believe the claim
will have a material  adverse effect on liquidity or the financial  condition of
the Company.  Although the Company maintains product liability  insurance,  this
claim arose during a period in which the Company was  self-insured.  The Company
currently does not have a reserve for this judgment.

Environmental Issues
--------------------

In the ordinary  course of its  business,  the Company is required to dispose of
certain waste at off-site locations. During 1993, the Company became aware of an
investigation  by the Illinois  Environmental  Protection  Agency (the "Illinois
Agency") of a waste disposal site, owned by a third party,  which was previously
utilized by the Company. As a result of that investigation,  the Illinois Agency
informed the Company that certain of the Company's practices with respect to the
identification,  storage and disposal of hazardous  waste and related  reporting
requirements  may not have complied with the applicable  law. On March 14, 1995,
the State of Illinois  filed a complaint  with the  Illinois  Pollution  Control
Board  against  the  Company  and the  disposal  site  owner  based  on the same
allegations.  The complaint seeks penalties not exceeding statutory maximums and
such other relief as the Pollution  Control Board  determines  appropriate.  The
disposal site owner filed a  cross-claim  against the Company that seeks to have
penalties  assessed against the Company and not against the disposal site owner.
Any penalties as a result of the cross-claim  would be payable to the State. The
Illinois Pollution Control Board has approved a settlement between the State and
the Company pursuant to which the Company paid $69,000 to the State and disposed
of certain materials in a container at the waste
                                       8
<PAGE>
disposal  site  at an  authorized  disposal  facility.  The  cross-claim  by the
landfill  owner is still  pending,  the  outcome  of this  cannot  presently  be
determind.

Additionally,  the Illinois Agency has been  negotiating  with the disposal site
owner with respect to the procedures and actions necessary to close the disposal
site.  The extent  and  nature of any  actions  which may be taken  against  the
Company with respect to this matter can not presently be determined.

Shareholder Litigation
----------------------

On February 16, 1995, an AMRE  shareholder  filed a lawsuit,  on his own behalf,
and a purported  class  action,  against AMRE and its  directors in the Chancery
Court of the State of  Delaware,  alleging  various  breaches of  fiduciary  and
common law duties and  requesting  both  monetary  and  injunctive  relief.  The
alleged  basis  for the  claims  are the  action  of AMRE and its  directors  in
connection  with the  authorization  and  approval  of the AMRE Merger with Bell
Sports Corp.  The AMRE Merger was  consummated  on July 3, 1995 and the case has
been inactive since that date. On October 2, 1995, the Company filed a motion to
dismiss the case.

NOTE 4 -  NOTES PAYABLE, LONG TERM DEBT AND CAPITAL LEASE OBLIGATIONS

The Company has  approximately  $153.2 million in notes payable,  long term debt
and capital  lease  obligations  outstanding  at March 29, 1997. Of this amount,
$86.25  million  relates to the  outstanding  balance on the 4 1/4%  convertible
subordinated  debentures.   Maturing  November  15,  2000,  the  debentures  are
convertible  into common  stock at any time prior to  maturity  at a  conversion
price of $54.06 per share. Interest on the debentures is payable  semi-annually.
The debentures  are  redeemable at the Company's  option at any time on or after
November 15, 1996, at specified redemption prices.

In  February  1996,  the  Company  entered  into a $100  million  multicurrency,
revolving line of credit (the "Revolving  Credit") with a syndicated bank group.
In  August  1996,  the  Company  amended  the  Revolving  Credit to grant to the
syndicated  bank group a  security  interest  in U.S.  accounts  receivable  and
inventories.  The security interest was subject to automatic release by the bank
group upon the achievement of certain  financial ratios after September 1, 1997.
The  amendment,  among other things,  waived a default in the interest  coverage
ratio  covenant as of June 29, 1996. At March 29, 1997, a total of $62.2 million
was outstanding  under the credit facility.  In April 1997, upon the sale of the
Service Cycle/Mongoose  inventory to Brunswick Corporation,  the Company amended
the  Revolving  Credit to reduce the amount of the line of credit to $60 million
("Amended  Credit  Agreement").  The  Amended  Credit  Agreement  grants  to the
syndicated bank group a security  interest in the U.S.  accounts  receivable and
inventories  for the term of the  facility.  The  amendment  added a  clean-down
provision  requiring the Amended  Credit  Agreement to be  maintained  below $15
million for a period of thirty  consecutive  days between July 1st and September
30th of each fiscal year.

The Amended  Credit  Agreement,  which  expires in December  1999,  provides the
Company with several interest rate options,  including U.S. prime,  LIBOR plus a
margin, Canadian prime plus the applicable LIBOR margin less 0.50%, the Canadian
banker's  acceptance  plus the LIBOR margin plus 0.125%,  and  short-term  fixed
rates  offered by the agent bank in the loan  syndication.  The LIBOR  margin is
currently 1.50% per annum, but it can range between 1.00% and 1.50% depending on
the Company's interest coverage ratio.  Under the Amended Credit Agreement,  the
Company is required to pay a quarterly  commitment  fee on the unused portion of
the  facility at a rate that ranges from 0.20% to 0.30% per annum.  At March 29,
1997, the quarterly commitment fee was 0.25% per annum.
                                       9
<PAGE>
The Amended Credit Agreement  contains  certain  financial  covenants,  the most
restrictive  of which are a minimum  interest  coverage  ratio, a maximum funded
debt ratio and a minimum adjusted net worth amount. The Amended Credit Agreement
also contains  covenants  that prohibit the payment of cash dividends as well as
restrict the amount that the Company can repurchase of its subordinated debt and
common stock.

NOTE 5 - COMMON STOCK

From  time  to  time,  the  Company  has  granted  to  its  executive  officers,
non-employee directors and certain other employees options to purchase shares of
the Company's Common Stock. At March 29, 1997, options to purchase approximately
1,910,500 shares of Common Stock were outstanding.

On August 24, 1995, the Company announced a stock repurchase program authorizing
the repurchase of up to 10% of the  outstanding  shares of the Company's  Common
Stock from time to time in open  market or private  transactions.  The timing of
any  repurchase  and the price and number of shares  repurchased  will depend on
market  conditions  and other factors.  To date,  the Company has  repurchased a
total of 523,400  shares at an aggregate  purchase price of  approximately  $5.5
million,  of which 28,328  shares were utilized  under a Restricted  Stock Award
Program.  Shares  repurchased  may be  retired  or used  for  general  corporate
purposes.

NOTE 6 - RESTRUCTURING CHARGES

On June 27, 1995,  the  Company's  stockholders  approved the issuance of Common
Stock in connection  with the  Agreement  and Plan of Merger dated  February 15,
1995 among the  Company,  Bell  Merger  Co., a  wholly-owned  subsidiary  of the
Company,   and  American   Recreation  Company  Holdings,   Inc.  ("AMRE").   In
contemplation of the merger, the Company formulated a program (the "Program") to
consolidate  and integrate the operations of Bell,  SportRack  (acquired May 15,
1995) and AMRE, as well as combine  certain  product lines.  This Program called
for the consolidation of certain sales and marketing,  research and development,
manufacturing, finance and management information systems functions.

During fiscal 1996, the Company commenced significant  organizational and office
consolidations including closing the Cerritos,  Providence,  Commack and Calgary
offices. Most U.S. sales, marketing and research and development operations were
consolidated in San Jose,  California and all corporate functions in Scottsdale,
Arizona. Substantially all of the Canadian operations were consolidated into one
facility in Granby,  Quebec.  Included in fiscal  1997  pre-tax  income are $1.5
million of  restructuring  charges  related to the Program,  including  facility
closing costs, severance benefits and relocation expenses.
                                       10
<PAGE>
During  the third  quarter  of  fiscal  1997,  the  Company  announced  plans to
significantly downsize the Scottsdale, Arizona corporate office by consolidating
certain Scottsdale functions with the San Jose,  California office.  Included in
the  third   quarter  of  fiscal  1997  pre-tax   income  are  $2.7  million  of
restructuring charges related to this consolidation plan.

The  following  table sets forth the details of activity  during fiscal 1997 for
restructuring charges:

<TABLE>
<CAPTION>
(in thousands)                                         Accrual at     Restructuring        Cash        Accrual at
                                                     June 29, 1996       Charges         Payments    March 29, 1997
                                                     --------------- ----------------- ------------- ----------------
<S>                                                      <C>         <C>                   <C>             <C>   
Lease payments and other facility expenses               $     942   $      983            ($  749)        $1,176
Severance and other related benefits                         2,832        1,627            ( 2,578)         1,881
Relocation and other                                         1,383        1,531            ( 1,736)         1,178
                                                     --------------- ----------------- ------------- ----------------
    Total                                                $   5,157   $    4,141            ($5,063)        $4,235
                                                     =============== ================= ============= ================
</TABLE>
NOTE 7 - LOSS ON DISPOSAL OF PRODUCT LINE

On April 29, 1997, the Company completed the sale of its Service  Cycle/Mongoose
inventory,  trademarks  and certain other assets to Brunswick  Corporation.  The
purchase  price  approximated  $21  million  and  includes  providing  Brunswick
Corporation  a three year option to  purchase  600,000  shares of the  Company's
common stock at an exercise price of $7.50 per share.  The Company  retained and
will collect the accounts  receivable for the Service  Cycle/Mongoose  business,
which were approximately $19 million at April 29, 1997.

As a result of the Service  Cycle/Mongoose  disposal the Company announced plans
to  reorganize  North  American  distribution  network and  operations to better
utilize facilities.

Included in the third quarter of fiscal 1997 pre-tax income are $25.4 million of
costs associated with the disposition of the Service Cycle/Mongoose business and
distribution  changes.  The write-off of goodwill and intangibles related to the
Service Cycle/Mongoose  business were $14.8 million,  Service Cycle disposal and
exit costs were $5.4  million,  and  reorganization  costs  associated  with the
distribution   network   and   operations   related   to  the  sale  of  Service
Cycle/Mongoose were $5.2 million.
                                       11
<PAGE>
                                     Item 2.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL POSITION AND LIQUIDITY

The Company's  current ratio decreased to 5.2 to 1 at March 29, 1997 from 5.4 to
1 at June 29, 1996. Cash, cash equivalents and marketable  securities  decreased
to $26.8  million at March 29,  1997 from $31.1  million at June 29,  1996.  The
decline primarily relates to cash used in operations.

The Company anticipates an increase in cash of approximately $40 million related
to the sale of the Service Cycle/Mongoose  inventory and from the collections of
related  receivables.  Management expects to use the proceeds to repay a portion
of the Company's Amended Credit Agreement, and other general corporate purposes,
which may  include the  repurchase  of the  Company's  common  stock  and/or its
convertible subordinated debentures.

Accounts receivable at March 29, 1997 increased $13.7 million from June 29, 1996
due to the use of extended  dating  programs  for sales to  independent  bicycle
dealers.  Management expects accounts receivable to decline by approximately $13
million  during  the  fourth  quarter  related  to  the  collection  of  Service
Cycle/Mongoose receivables.

Inventories  increased  $13.0  million in fiscal 1997 compared to the balance at
June 29, 1996.  The increase is due to the build-up of inventory in  preparation
for the spring selling season.  Management  expects  inventory to decline during
the fourth quarter by  approximately  $18 million related to the sale of Service
Cycle/Mongoose inventory.

In  February  1996,  the  Company  entered  into a $100  million  multicurrency,
revolving line of credit (the "Revolving  Credit") with a syndicated bank group.
This facility  replaced prior revolving credit  facilities that were used by the
Company's  North American  operations.  In August 1996, the Company  amended the
Revolving  Credit to grant to the syndicated  bank group a security  interest in
U.S. accounts  receivable and inventories.  The security interest was subject to
automatic  release by the bank group upon the  achievement of certain  financial
ratios after  September 1, 1997.  The  amendment,  among other things,  waived a
default in the  interest  coverage  covenant as of June 29,  1996.  At March 29,
1997, a total of $62.2 million was  outstanding  under the credit  facility.  In
April 1997, upon the sale of the Service  Cycle/Mongoose  inventory to Brunswick
Corporation,  the Company  amended the Revolving  Credit to reduce the amount of
the line of credit to $60  million  ("Amended  Credit  Agreement").  The Amended
Credit Agreement grants to the syndicated bank group a security  interest in the
U.S.  accounts  receivable  and  inventories  for the term of the facility.  The
amendment added a clean-down provision requiring the Amended Credit Agreement to
be maintained below $15 million for a period of thirty  consecutive days between
July 1st and September 30th of each fiscal year.

The  Amended  Credit  Agreement   facility   outstanding   borrowings have  been
significantly  reduced  due to the  proceeds  related  to  sale  of the  Service
Cycle/Mongoose  business and  management  anticipates  that they will be reduced
further due to cash  generated  from  operations,  including  collection  of the
Service Cycle/Mongoose receivables.

The Amended  Credit  Agreement,  which  expires in December  1999,  provides the
Company with several interest rate options,  including U.S. prime,  LIBOR plus a
margin,  Canadian  prime plus the applicable  LIBOR margin less 0.50%,  Canadian
banker's  acceptance  plus the LIBOR margin plus 0.125%,  and  short-term  fixed
rates  offered by the agent bank in the loan  syndication.  The LIBOR  margin is
currently 1.50% per annum, but it can range between 1.00% and 1.50% depending on
the Company's interest coverage ratio.  Under the Amended Credit Agreement,  the
Company is required to pay a quarterly  commitment  fee on the unused portion of
the  facility at a rate that ranges from 0.20% to 0.30% per annum.  At March 29,
1997 the quarterly commitment fee was 0.25% per annum.
                                       12
<PAGE>
The Amended Credit Agreement  contains  certain  financial  covenants,  the most
restrictive  of which are a minimum  interest  coverage  ratio, a maximum funded
debt ratio and a minimum adjusted net worth amount.  It also contains  covenants
that prohibit the payment of cash  dividends as well as restrict the amount that
the Company can repurchase of its subordinated debt and common stock.

Capital expenditures were $5.8 million for the first nine months of fiscal 1997.
The Company expects to spend approximately $6.5 million on capital  expenditures
in fiscal year 1997, primarily for computer systems and new product tooling.

A principal business strategy of the Company has been to pursue  acquisitions of
businesses,  products or technologies that will complement its current business.
The Company has  identified  bicycle  related and sporting  goods  industries as
possible areas of focus.  Such  acquisitions  may be funded with available cash,
debt financing,  issuance of common stock or a combination thereof. With respect
to  acquisitions  prior to fiscal  1997,  the  Company  has  contingent  earnout
payments  that could  approximate  $1.9  million,  subject  to future  financial
results.  In  November  1996,  the  Company  acquired a  distributor  in Sydney,
Australia to directly market its products.

Additionally,  from time to time the Company  evaluates  the  strategic  fit and
financial  performance of its various  operating  units and product lines.  As a
result of such  evaluations,  the Company could decide to divest or  discontinue
certain portions of the business.

The Company believes its available cash flows from operations, the proceeds from
the sale of the Service Cycle/Mongoose business and the Amended Credit Agreement
should be adequate to satisfy its working  capital  requirements in fiscal 1997.
The Company  does not  anticipate  paying  dividends  on its Common Stock in the
foreseeable future.

Certain matters  contained  herein are  forward-looking  statements that involve
risks and  uncertainties  that could cause actual  results to differ  materially
from those in the forward-looking statements. These include, but are not limited
to: seasonality,  adverse outcome from pending litigation,  competitive actions,
loss of  significant  customers,  timing of major  customer  shipments,  adverse
weather  conditions,  retail  environment,  pending  accounting  pronouncements,
economic conditions and currency fluctuations.
                                       13
<PAGE>
RESULTS OF OPERATIONS

         Net Sales.  Net sales increased by 5% to $70.6 million during the three
months  ended March 29, 1997 as compared to $67.4  million in the same period of
1996. Bicycle accessories sales increased 16% over prior year. This increase was
offset by a  decrease  in bicycle  sales of 8% and  bicycle  helmet  sales of 5%
compared  to a year ago.  Bicycle  helmets  have  increased  in the  independent
bicycle dealer channel, but have decreased in the mass merchant channel from the
prior year. On a  year-to-date  basis net sales  increased 4% to $189.3  million
from $181.3  million in the  previous  year.  The  year-to-date  increase can be
attributed to IBD bicycle helmet sales and increased  bicycle  accessories sales
offset by lower bicycle and mass merchant helmet sales.

The  product  line sales mix for the nine month and three  month  periods are as
follows:

                               Nine Months Ended         Three Months Ended
                               -----------------         ------------------

                             March 29,     March 30,    March 29,    March 30,
                               1997          1996         1997         1996
                               ----          ----         ----         ----
Product Line Sales Mix:
     Bicycle accessories         49%          48%           50%         45%
     Bicycle helmets             32%          31%           35%         38%
     Bicycles                    18%          20%           13%         15%
     Auto Racing helmets          1%           1%            2%          2%


Management is cautiously  optimistic about the fourth quarter of fiscal 1997 due
to recent  helmet  growth in the IBD channel and strong  accessory  sales in the
mass merchant channel.

         Gross Margin.  Gross margins decreased to 29% of net sales in the third
quarter of fiscal  1997,  compared to 31% in the  comparable  prior year period,
excluding  the impact of the  inventory  write-up  related to the  January  1996
acquisition  of Giro Sport  Design.  This  decrease is attributed to lower gross
margins on bicycle sales due to end of season close-out sales during the quarter
as compared to prior year, as well as a shift of bicycle helmet sales volumes to
lower  price point  helmets.  For the first nine  months of fiscal  1997,  gross
margins  remained  at 29% of net sales,  compared  to the same  period of fiscal
1996,  excluding the impact of the inventory write-up related to the merger with
AMRE and the acquisitions of SportRack and Giro.

During the third quarter and the first nine months of fiscal 1996,  $1.0 million
and $14.1 million, respectively,  were charged to cost of sales for the write-up
of inventory  related to the merger with AMRE and the  acquisitions of SportRack
and Giro.

         Selling,    General   and   Administrative.    Selling,   general   and
administrative  costs were 22% of net sales in the third  quarter of fiscal 1997
compared to 25% in fiscal 1996. Actual selling, general and administrative costs
decreased $1.7 million to $15.4 million for the quarter. On a comparative basis,
selling,  general and administrative costs declined by $2.1 million or 13%, when
excluding Giro costs not included for the full prior year quarter.  On a year to
date basis,  selling,  general and  administrative  costs  decreased 2% to $45.3
million.   When  excluding  Giro,   costs  declined  by  $5.2  million  or  11%.
Year-to-date selling,  general and administrative costs represented 24% of sales
compared to 26% in the same period of fiscal 1996. These reductions  result from
the  Company's  recent  restructuring  activities  and  management's  continuing
efforts to reduce the Company's overall selling, general and administrative cost
structure.
                                       14
<PAGE>
Management   anticipates   the  trend  of   declining   selling,   general   and
administrative  expenses  as a percent  of net sales to  continue  in the fourth
quarter. Additionally, based upon the April 1997 consolidation plan and the plan
to reorganize  the Company's  distribution  network and  operations,  management
anticipates  that the cost  structure can be further  reduced  after  successful
completion of such plans.

         Loss on  Disposal  of Product  Line.  On April 29,  1997,  the  Company
completed  the sale of its  Service  Cycle/Mongoose  inventory,  trademarks  and
certain other assets to Brunswick Corporation.  Included in the third quarter of
fiscal  1997  pre-tax  income  are $25.4  million of costs  associated  with the
disposition of the Service Cycle/Mongoose business and distribution changes. The
write-off  of goodwill  and  intangibles  related to the Service  Cycle/Mongoose
business  were $14.8  million,  Service  Cycle  disposal and exit cost were $5.4
million, and the sale of Service Cycle/Mongoose  reorganization costs associated
with distribution network and were $5.2 million.

         Amortization  of  intangibles.  Amortization of goodwill and intangible
assets  increased to $864,000 in the third  quarter of 1997 from $736,000 in the
third  quarter of 1996,  and to $2.6  million in the first nine months of fiscal
1997 from $1.9 million in the first nine months of fiscal 1996.  The increase is
due to the acquisition of Giro in January 1996.

Amortization  expense in the fourth  quarter is  expected to decline by $137,000
due to the write -off of $14.8  million of Service  Cycle/Mongoose  goodwill and
intangibles related to the sale of such business.

         Restructuring  charges.  During the third  quarter of fiscal 1997,  the
Company  announced  plans to  significantly  downsize  the  Scottsdale,  Arizona
corporate  office by  consolidating  certain  Scottsdale  functions with the San
Jose,  California  office.  Included in the third quarter of fiscal 1997 pre-tax
income are $2.7 million of restructuring charges related to this plan.

During fiscal 1996, the Company commenced significant  organizational and office
consolidations  including closing four offices.  Most U.S. sales,  marketing and
research and development  operations were  consolidated in San Jose,  California
and all corporate  functions in Scottsdale,  Arizona.  Substantially  all of the
Canadian  operations  were  consolidated  into one  facility in Granby,  Quebec.
Restructuring  charges  were $1.5  million and $1.9  million for fiscal 1997 and
1996 for the nine month period, respectively relating to these activities.

Total restructuring charges were approximately $4.1 million and $1.9 million for
fiscal 1997 and 1996 for the nine month period, respectively.

         Net investment income and interest  expense.  For the fiscal 1997 third
quarter,  net investment  income decreased to $323,000,  compared to $455,000 in
fiscal  1996.  This  decline  is due to  lower  levels  of cash  and  marketable
securities invested during the quarter.  Net investment income increased to $2.6
million for the first nine months in fiscal  1997,  compared to $2.4  million in
fiscal 1996. The increase is due to settlement of an arbitration case related to
the handling of certain  marketable  securities by an outside investment advisor
during the first quarter of fiscal 1997. The settlement proceeds, net of related
expenses and expected losses to sell certain securities,  of $1.3 million,  were
included in net investment income. Interest expense decreased to $1.9 million in
the third  quarter  of fiscal  1997 from $2.3  million  in the third  quarter of
fiscal 1996. On a year-to-date basis, interest expense decreased to $5.5 million
for fiscal 1997 from $6.6  million for fiscal  1996.  The  decreases  are due to
lower debt  balances  outstanding  and lower  interest  rates for the first nine
months of fiscal 1997 compared to the prior year.
                                       15
<PAGE>
         Income  taxes.  The  effective tax rate was 39% for the quarter and 40%
for the nine month period of fiscal 1997,  excluding  restructuring  charges and
the impact of the loss on the  disposal of a product  line,  compared to 51% for
the  comparable  prior year  quarter and 42% for the nine month period of fiscal
1996, before restructuring charges and the effect of the inventory write-up. The
effective  rate was 13% and 14%,  respectively,  if such costs were included for
both  periods  in fiscal  1997 and 27% for both the  quarter  and the nine month
period of fiscal 1996. The current year's  effective rates differ  significantly
from the federal  statutory rate of 34% due to several large expense items which
are not deductible for federal or state income tax purposes.

         Net income and weighted  average  shares.  Results from  operations for
fiscal 1997 third quarter, before restructuring charges and the loss on disposal
of product line, were net income of $1.7 million, or $0.12 on a per share basis,
compared  to net  income,  before  restructuring  charges  and the effect of the
inventory write-up,  of $623,000,  or $0.05 per share, in the previous year. For
the first nine months of fiscal  1997,  net income  increased to $2.1 million or
$0.15 per  share,  before  restructuring  charges  and the loss on  disposal  of
product  line  compared to a net loss of  $560,000,  or $0.04 per share,  in the
previous  year  before  restructuring  charges  and the effect of the  inventory
write-up. Results from operations including the effects of restructuring charges
and the loss on disposal of product line for the fiscal 1997 third quarter was a
loss of $21.9  million,  or $1.59 per share,  compared  to income of $713,000 or
$0.05 per share for the fiscal  1996 third  quarter.  For the nine month  period
ending March 29, 1997, results from operations were a loss of $22.4 million,  or
$1.63 per share,  compared to a loss of $12.4 million,  or $0.90 per share,  for
the same period of fiscal 1996. The fiscal 1996 results included a $14.1 million
charge for the inventory  write-up  arising from the acquisition of SportRack in
May 1995, the merger with AMRE, Inc. in July 1995 and the acquisition of Giro in
January 1996.

Weighted  average  shares  outstanding  for the fiscal three month periods ended
March  29,  1997 and  March  30,  1996  were  13.8  million  and  13.6  million,
respectively.  Year-to-date  outstanding  shares for both fiscal 1997 and fiscal
1996 were 13.7 million shares.
                                       16
<PAGE>
                                BELL SPORTS CORP.
                                     PART II

Item 1               Legal Proceedings
                     None

Item 2               Changes in Securities
                     None

Item 3               Defaults Upon Senior Securities
                     None

Item 4               Submission of Matters to a Vote of Security Holders
                     None

Item 5               Other Information
                     None

Item 6               Exhibits and Reports on Form 8-K

                     (a.)     Exhibit Index page 19
                                       17
<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.

Date:    May 13, 1997


                           BELL SPORTS CORP.




  /s/ Linda K. Bounds      Executive Vice President and Chief Financial Officer
---------------------      ----------------------------------------------------
Linda K. Bounds            (Principal financial officer)


  /s/ John A. Williams     Vice President and Corporate Controller
---------------------      ---------------------------------------
John A. Williams           (Principal accounting officer)
                                       18
<PAGE>
                                BELL SPORTS CORP.
                                INDEX TO EXHIBITS


Exhibit
Number            Description                                            Page
--------------------------------------------------------------------------------

10.1              Employment Agreement with Mary J. George              Page 20

10.2              Employment Agreement with Linda K. Bounds             Page 29

11                Statement re: computation of per share earnings       Page 39

27                Financial Data Schedule                               Page 40
                                       19