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                       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 JANUARY 1, 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 0-19873

                                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.)

        6350 San Ignacio Avenue,
          San Jose, California                                      95119
(Address of Principal Executive Offices)                          (Zip Code)

                                 (408) 574-3400
              (Registrant's Telephone Number, Including Area Code)

    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 [ ]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

    The  number of shares  outstanding  of each of the  registrant's  classes of
common stock, as of February 3, 2000:

         Class                                        Number of Shares
         -----                                        ----------------
         Class A Common Stock, $.01 par value             869,976
         Class B Common Stock, $.01 par value             135,650
         Class C Common Stock, $.01 par value              45,850

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<PAGE>
                                BELL SPORTS CORP.
                               INDEX TO FORM 10-Q

                                     PART I

                                                                     Page Number
                                                                     -----------
Bell Sports Corp. and Subsidiaries Consolidated Balance Sheets
  as of January 1, 2000 and July 3, 1999 ...........................       3

Bell Sports Corp. and Subsidiaries Consolidated Statements of
  Operations for the six months and three months ended
  January 1, 2000 and December 26, 1998 ............................       4

Bell Sports Corp. and Subsidiaries Consolidated Condensed
  Statements of Cash Flows for the six months ended
  January 1, 2000 and December 26, 1998 ............................       5

Notes to Consolidated  Financial Statements ........................     6 - 11

Management's Discussion and Analysis of Financial Condition and
  Results of Operations ............................................    12 - 14


                                     PART II

Items 1 to 6 .......................................................       15

Signatures .........................................................       16

                                       2
<PAGE>
                         PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                       BELL SPORTS CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
              (IN THOUSANDS, EXCEPT SHARE DATA AND PER SHARE DATA)

                                                         January 1,     July 3,
                                                            2000         1999
                                                         -----------  ----------
                                                         (unaudited)
ASSETS
Current assets:
 Cash and cash equivalents                               $   6,559    $   8,875
 Accounts receivable                                        59,830       58,634
 Inventories                                                47,928       43,664
 Deferred taxes                                             10,910       11,366
 Other current assets                                        8,750        6,134
                                                         ---------    ---------
       Total current assets                                133,977      128,673

Property, plant and equipment                               12,897       16,162
Long-term deferred taxes                                    12,500       12,500
Goodwill                                                    52,028       52,429
Intangibles and other assets                                 8,772        9,170
                                                         ---------    ---------
       Total assets                                      $ 220,174    $ 218,934
                                                         =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                        $  14,764    $   9,249
 Accrued compensation and employee benefits                  3,327        2,580
 Accrued expenses                                           18,821       31,682
 Notes payable and current maturities of long-term
   debt and capital lease obligations                       17,780       10,433
                                                         ---------    ---------
       Total current liabilities                            54,692       53,944

Long-term debt                                             149,187      148,270
Capital lease obligations and other liabilities              8,275       10,255
                                                         ---------    ---------
       Total liabilities                                   212,154      212,469
                                                         ---------    ---------
Commitments and contingencies

Stockholders' equity:
 Series A Preferred Stock; 6% cumulative, $.01
  par value; authorized 1,500,000 shares, 1,033,957
  and 1,034,781 shares issued and outstanding at
  January 1, 2000 and July 3, 1999, respectively                10           10
 Class A Common Stock; $.01 par value; authorized
  900,000 shares, 869,976 and 870,661 shares issued
  and outstanding at January 1, 2000 and July 3, 1999,
  respectively                                                   9            9
 Class B Common Stock; $.01 par value; authorized
  150,000 shares, 135,650 and 128,200 shares issued
  and outstanding at January 1, 2000 and July 3, 1999,
  respectively                                                   1            1
 Class C Common Stock; $.01 par value; authorized 50,000
  shares, 45,850 and 50,000 shares issued and outstanding
  at January 1, 2000 and July 3, 1999, respectively              1            1
 Additional paid-in capital                                 53,235       53,210
 Accumulated other comprehensive income                     (2,267)      (1,925)
 Accumulated deficit                                       (42,969)     (44,841)
                                                         ---------    ---------
       Total stockholders' equity                            8,020        6,465
                                                         ---------    ---------
       Total liabilities and stockholders' equity        $ 220,174    $ 218,934
                                                         =========    =========

       See accompanying notes to these consolidated financial statements.

                                       3
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            (UNAUDITED, IN THOUSANDS)

<TABLE>
<CAPTION>
                                             Six Months Ended              Three Months Ended
                                        --------------------------      --------------------------
                                        January 1,    December 26,      January 1,    December 26,
                                          2000           1998             2000           1998
                                        --------       --------         --------       --------
<S>                                     <C>            <C>              <C>            <C>
Net sales                               $ 97,822       $ 85,939         $ 50,972       $ 45,021
Cost of sales                             63,857         57,876           34,121         30,502
                                        --------       --------         --------       --------

Gross profit                              33,965         28,063           16,851         14,519
Selling, general and
 administrative expenses                  24,488         23,299           11,832         11,943
Foreign exchange (gain) loss                  12          1,949               (3)           330
Amortization of goodwill and
 intangible assets                         1,079          1,061              552            499
Transaction costs                             --         12,388               --          2,505
Net investment income                       (175)          (810)             (69)          (209)
Interest expense                           8,421          6,742            4,223          4,204
                                        --------       --------         --------       --------

Income (loss) before income taxes            140        (16,566)             316         (4,753)
Provision for (benefit from)
 income taxes                                 57         (3,315)             129         (1,949)
                                        --------       --------         --------       --------

Income (loss) before extraordinary
 items                                        83        (13,251)             187         (2,804)
Extraordinary item: Gain on early
 extinguishment of debt, net of taxes
 of $2,006                                    --          2,887               --             --
                                        --------       --------         --------       --------

Net income (loss)                       $     83       $(10,364)        $    187       $ (2,804)
                                        ========       ========         ========       ========
</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)


                                                             Six Months Ended
                                                         -----------------------
                                                         January 1, December 26,
                                                           2000        1998
                                                          -------    ---------
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
    Net cash provided by (used in) operating activities   $(7,825)   $  (3,390)
                                                          -------    ---------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
  Capital expenditures                                     (1,728)      (2,341)
  Expenditures to acquire intangible assets                  (557)          --
                                                          -------    ---------

    Net cash provided by (used in) investing activities    (2,285)      (2,341)
                                                          -------    ---------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
  Proceeds from issuance of senior subordinated notes          --      110,000
  Expenditures related to issuance of senior
    subordinated notes                                         --       (4,700)
  Proceeds from issuance of senior discount notes              --       15,000
  Proceeds from issuance of preferred stock                    25       44,555
  Repurchase of common stock                                   --     (142,350)
  Tender of subordinated debentures                            --      (57,681)
  Net borrowings (payments) on notes payable, long-term
    debt and capital leases                                   279         (918)
  Net borrowings (payments) on line of credit agreement     7,732        5,404
  Expenditures related to issuance of line of credit           --       (1,381)
                                                          -------    ---------

    Net cash provided by (used in) financing activities     8,036      (32,071)
                                                          -------    ---------

Effect of exchange rate changes on cash                      (242)        (826)
                                                          -------    ---------

Net increase (decrease) in cash and cash equivalents       (2,316)     (38,628)
Cash and cash equivalents at beginning of period            8,875       45,093
                                                          -------    ---------

Cash and cash equivalents at end of period                $ 6,559    $   6,465
                                                          =======    =========

       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

THE COMPANY

     Bell Sports Corp.  and its  wholly-owned  subsidiaries  (collectively,  the
"Company" or "Bell") is the leading manufacturer and marketer of bicycle helmets
worldwide and a leading supplier of a broad line of bicycle accessories in North
America. The Company is also a supplier of bicycle accessories worldwide.

PRINCIPLES OF CONSOLIDATION AND ACCOUNTING PERIOD

     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. 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. The Company's  fiscal second quarter in
both 2000 and 1999 had thirteen weeks.

UNAUDITED INFORMATION AND BASIS OF PRESENTATION

     The  consolidated  balance  sheet as of January 1, 2000 and  statements  of
operations  and  of  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 July 3, 1999, June 27, 1998 and
June 28, 1997 which are  included in the  Company's  1999 Annual  Report on Form
10-K.

ACCOUNTS RECEIVABLE

     Accounts  receivable  at  January  1,  2000  and  July 3,  1999  are net of
allowances for doubtful accounts of $1.2 million and $1.8 million, respectively.

PROPERTY, PLANT AND EQUIPMENT

     Property,  plant and  equipment at January 1, 2000 and July 3, 1999 are net
of accumulated depreciation of $21.3 million and $23.2 million, respectively.

MANAGEMENT'S ESTIMATES AND ASSUMPTIONS

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

                                       6
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 2 - COMPREHENSIVE INCOME

     Comprehensive income for the periods presented is calculated as follows:

                                  Six Months Ended         Three Months Ended
                              ------------------------  ------------------------
                              January 1,  December 26,  January 1,  December 26,
                                 2000         1998        2000         1998
                                 ----         ----        ----         ----
Net income (loss)               $  83      $(10,364)      $ 187       $(2,804)
Foreign currency translation
  adjustment, net of tax         (342)         (552)       (284)         (831)
                                -----      --------       -----       -------
Comprehensive income (loss)     $(259)     $(10,916)      $(162)      $(3,635)
                                =====      ========       =====       =======

NOTE 3 - INVENTORIES

     Inventories consist of the following components (in thousands):

                                           January 1,      July 3,
                                              2000          1999
                                              ----          ----
                Raw materials                $4,336         $3,579
                Work in process               1,293          1,089
                Finished goods               42,299         38,996
                                            -------        -------
                     Total                  $47,928        $43,664
                                            =======        =======

NOTE 4 - COMMITMENTS 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.

     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 auto racing  helmet  business in July 1999 and entered
into a long-term  royalty-free  licensing  agreement with the purchaser for auto
racing  helmets and  automotive  accessories to be marketed under the Bell brand
name. The Company retains  responsibility  for product liability claims relating
to auto racing helmets  manufactured prior to the sale of the auto racing helmet
business.  The Company  believes  that, by virtue of its status as a licensor it
could be named as a defendant  in actions  involving  liability  for auto racing
helmets  and  automotive  accessories  manufactured  by  the  purchaser  of  the
Company's auto helmet business.

     In February  1996, a Toronto,  Canada jury  returned a verdict  against the
Company based on injuries  arising out of a 1986 motorcycle  accident.  The jury
found that the Company was 25%  responsible  for the injuries with the remaining
75% of the fault  assigned  to the  plaintiff  and the other  defendant.  In the
second quarter of fiscal 2000, the Company paid the judgment of $3.6 million.

     Based on  management's  extensive  consultation  with  legal  counsel,  the
Company has established product liability reserves totaling $10.1 million. These
reserves are intended to cover the estimated  costs for the defense,  payment or
settlement  of known  claims.  Management  believes it will have  adequate  cash
balances and sources of capital available to satisfy any payments necessary.

                                       7
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ENVIRONMENTAL LITIGATION

     In May 1998, the Company received a De Minimis Notice Letter and Settlement
Offer from the United States Environmental Protection Agency ("USEPA") under the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C.  Sections 9601 ET SEQ. for the  Operating  Industries,  Inc.  Landfill
Superfund  Site  ("OII  Site") in  Monterey  Park,  California.  CERCLA  imposes
liability  for the costs of cleaning  up, and certain  damages  resulting  from,
releases and threatened releases of hazardous  substances.  Although courts have
interpreted  CERCLA  liability  to be joint and  several,  where  feasible,  the
liability  typically is allocated among the responsible  parties  according to a
volumetric or other standard.  USEPA  apparently has identified the Company as a
DE MINIMIS  potentially  responsible  party based on several waste shipments the
Company  allegedly  sent to the site in the  late  1970s  and in  1980.  USEPA's
settlement  offer to the  Company  is in the range of $29,000  to  $36,000.  The
settlement  would cover all past and expected future costs at the OII Site, and,
with limited exceptions,  provide the Company with covenants not to sue from the
United States and California,  and contribution protection from private parties.
Accordingly,  management  does not expect this claim to have a material  adverse
effect on the Company.

     In another unrelated  matter,  the Company received a General Notice Letter
in October 1998 from USEPA under CERCLA for the Casmalia  disposal site in Santa
Barbara County, California.  USEPA apparently has identified the Company as a DE
MINIMIS  potentially  responsible  party based on several  waste  shipments  the
Company allegedly sent to the site during the 1980s. USEPA's settlement offer to
the  Company  is in the  range  of  $27,000  to  $36,000.  The  benefits  of the
settlement are similar to those offered by USEPA for the OII site.  Accordingly,
management  does not expect this claim to have a material  adverse effect on the
Company.

     Besides the  litigation  described  above,  management  is not aware of any
material litigation that, if adversely determined,  would have a material effect
on the Company's financial liabilities.

NOTE 5 - NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

     On August 17, 1998,  the Company's  wholly-owned  subsidiary,  Bell Sports,
Inc.  ("BSI"),  issued Notes totaling $110.0 million,  bearing  interest at 11%,
maturing on August 15, 2008. Interest on the Notes is payable on February 15 and
August 15 of each year.  The Notes are  redeemable,  in whole or in part, at the
option of BSI at any time on or after  August 15,  2003,  in cash,  at specified
redemption  prices. In addition,  prior to August 15, 2001, BSI may redeem up to
35% of the Notes for 111% of their principal amount, plus accrued interest.  The
Company has fully and unconditionally  guaranteed the Notes.  Separate financial
statements  and  other  disclosures  relating  to BSI  have not  been  made,  as
management  believes  that such  information  is not  material to holders of the
Notes.  Summarized  financial  information  regarding  Bell  Sports,  Inc. is as
follows:

           BELL SPORTS, INC.
                                                           January 1, 2000
                                                           ---------------
           SUMMARIZED BALANCE SHEET DATA:                    (unaudited)
                Current assets                                 $151,394
                Total assets                                    201,425
                Current liabilities                              54,219
                Total liabilities                               172,495
                Stockholder's equity                             28,930

                                                          Six Months Ended
                                                           January 1, 2000
                                                          ------------------
           SUMMARIZED STATEMENT OF OPERATIONS DATA:          (unaudited)
                Net sales                                       $97,822
                Gross profit                                     33,965
                Net income                                        2,142

     On August 17, 1998, the Company issued  Discount Notes bearing  interest at
14% totaling $15.0 million and maturing on August 14, 2009 to a related party in
a private placement transaction.  Interest on the Discount Notes accrues on June
1 and  December  1 of each  year.  On March 12,  1999,  Discount  Notes  with an
accreted value of $2.4 million were exchanged for 47.6 thousand shares of Series
A Preferred Stock and 39.2 thousand shares of Class A Common Stock.

                                       8
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

     The  Company  has also issued 4 1/4%  Convertible  Subordinated  Debentures
("Debentures")  due November  2000, of which $23.8 million were  outstanding  at
January 1, 2000. The  Debentures  are redeemable at the Company's  option at any
time at specified redemption prices.

     In August  1998,  the Company and BSI entered into a $60.0  million  senior
secured  revolving credit facility ("Credit  Agreement")  expiring on August 17,
2003. The Credit Agreement  provides for mandatory  repayments from time to time
to the extent the amount  outstanding  thereunder  exceeds  the  maximum  amount
permitted  under the  borrowing  base.  Based on the  provisions  of the  Credit
Agreement,  the Company could borrow a maximum of $55.1 million as of January 1,
2000. As of January 1, 2000, there were borrowings  outstanding of $17.0 million
under the Credit Agreement.

     The Credit  Agreement  provides  the Company  with the option of  borrowing
based  either on the U.S.  prime rate plus a margin or LIBOR plus a margin.  The
margin for the U.S.  prime rate can  fluctuate  between  0.0% and 1.0%,  and the
margin  for  LIBOR  loans  can  fluctuate  between  1.0% and  2.0%  based on the
Company's  earnings and debt. At January 1, 2000,  the margin for U.S. prime was
0.75% and the  margin  for LIBOR was  1.75%.  Under the  Credit  Agreement,  the
Borrower is required to pay a quarterly  commitment fee on the unused portion of
the  facility at a rate that  ranges from 0.375% to 0.50% per annum,  based on a
pricing ratio.  At January 1, 2000,  the quarterly  commitment fee was 0.50% per
annum.

     The Credit Agreement  contains  certain  financial  covenants,  including a
maximum leverage ratio, a minimum fixed charge coverage ratio and a minimum cash
interest  coverage ratio. It also contains  covenants which restrict the ability
of the Company to pay  dividends,  incur liens,  issue  certain types of debt or
equity,  engage in mergers,  acquisitions  or asset  sales,  or to make  capital
expenditures.  At January 1, 2000,  the  Company was in  compliance  with or had
obtained waivers for all bank covenants.


     Long-term debt consists of the following (in thousands):

                                                          January 1,    July 3,
                                                            2000         1999
                                                            ----         ----
          11% senior subordinated debentures maturing
            August 2008                                   $110,000     $110,000
          4 1/4% convertible subordinated debentures
            maturing November 2000                          23,750       23,750
          14% senior discount notes due August 2009         15,437       14,434
          Borrowings under line of credit                   17,732       10,000
          Notes collateralized by certain equipment             --          391
                                                          --------     --------
                                                           166,919      158,575
          Less: current maturities                          17,732       10,305
                                                          --------     --------
               Total long-term debt                       $149,187     $148,270
                                                          ========     ========

NOTE 6 - DISPOSITIONS AND RESTRUCTURING

     In September 1999, the Company sold its European  manufacturing facility in
Roche La Moliere,  France.  In addition,  the Company  entered into an agreement
with the  purchaser  pursuant to which the  purchaser  has agreed to provide the
Company  with  helmets.  The  Company  recorded  a  charge  in  fiscal  1999  of
approximately   $2.5   million  in   connection   with  the  sale  and   related
reorganization of the Company's  European  manufacturing  facility.  No material
gain or loss was recognized upon consummation of the sale in September 1999.

     In the fourth quarter of fiscal 1999, the Company recorded charges of $16.5
million  associated with the  consolidation  of  manufacturing  facilities,  the
streamlining of administrative overhead, the divestiture of the Company's former
auto racing  division  and the  closure of the  Australian  sales and  marketing
office.  At  January  1, 2000,  the  remaining  reserves  related  primarily  to
facilities  leases.  Activity in these  accruals  for the first two  quarters of
fiscal 2000 was as follows:

                                       9
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                         July 3,    Cash    Non-cash  January 1,
                                          1999    Payments  Charges      2000
                                        --------  -------   -------     ------
ACCRUALS:
 Manufacturing consolidation             $ 9,102   $(3,993)  $(1,767)    $3,342
 Overhead reductions                       2,224    (1,037)   (1,159)        28
 Sale of auto racing and Australia           788      (531)     (200)        57
 Restructuring accruals from prior years     493      (278)       --        215
                                         -------   -------   -------     ------
                                         $12,607   $(5,839)  $(3,126)    $3,642
                                         =======   =======   =======     ======

NOTE 7 - SEGMENT INFORMATION

     The Company has three reportable  segments:  products sold to domestic mass
merchants,  products sold to domestic  independent  bicycle dealers (IBDs),  and
products sold in international  operations.  The  international  operations have
been  combined  into one  reportable  segment as they  share a  majority  of the
aggregation criteria and are not individually reportable. The Company's domestic
mass merchant  segment  markets a wide range of bicycle  accessories and bicycle
helmets through the mass merchant channel,  including retailers such as Wal-Mart
and  K-Mart.  The  domestic  IBD segment  markets  premium  bicycle  helmets and
accessories to independent  bicycle dealers such as bicycle chains,  independent
bicycle  shops,  specialized  sporting  goods stores,  and mail order  catalogs.
International  operations include sales of bicycle  accessories and helmets sold
to both mass  merchant and IBD  channels in Canada,  Europe and, in fiscal 1999,
Australia, in addition to distributing third party products.

     The Company  evaluates the performance of, and allocates  resources to, the
reportable segments based on net sales and EBITDA. For internal purposes, EBITDA
is defined as earnings before  investment  income and interest  expense,  income
taxes,  depreciation,   amortization,  and  certain  one-time  charges  such  as
transaction  costs,  product  liability  costs,   restructuring  charges,  asset
write-offs, other costs, loss on disposal of product line and sale of assets and
other  one-time  costs such as foreign  exchange loss and  compensation  expense
related to the grant of stock options.

<TABLE>
<CAPTION>
                                      Mass Merchants     IBD     International   Other (1)    Total
                                      --------------   -------   -------------   ---------   --------
<S>                                      <C>           <C>          <C>          <C>         <C>
SIX MONTHS ENDING JANUARY 1, 2000:
   Sales to unaffiliated customers       $52,620       $28,684      $16,518      $     --    $ 97,822
   EBITDA                                  9,567         1,614          586          (196)     11,571

SIX MONTHS ENDING DECEMBER 26, 1998:
   Sales to unaffiliated customers       $39,739       $28,120      $18,080      $     --    $ 85,939
   EBITDA                                  3,933         1,152          424         2,029       7,538

THREE MONTHS ENDING JANUARY 1, 2000:
   Sales to unaffiliated customers       $26,192       $14,070      $10,710      $     --    $ 50,972
   EBITDA                                  4,458         1,055          672          (148)      6,027

THREE MONTHS ENDING DECEMBER 26, 1998:
   Sales to unaffiliated customers       $19,572       $13,701      $11,748      $     --    $ 45,021
   EBITDA                                  1,874           449          702           619       3,644

TOTAL ASSETS:
   January 1, 2000                       $54,938       $34,886      $19,621      $110,729    $220,174
   July 3, 1999                           59,176        27,996       29,335       102,427     218,934
</TABLE>
----------
(1)  The "Other"  designation  includes corporate  expenditures and expenditures
     related to the Company's U.S. manufacturing facility.

                                       10
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

     EBITDA for the periods  shown is  reconciled  to net income  before  income
taxes as follows:

<TABLE>
<CAPTION>
                                                 Six Months Ended            Three Months Ended
                                             ------------------------     ------------------------
                                             January 1,  December 26,     January 1,  December 26,
                                                2000         1998           2000         1998
                                                ----         ----           ----         ----
<S>                                           <C>          <C>             <C>          <C>
EBITDA                                        $ 11,571     $  7,538        $ 6,027      $ 3,644
Less:
  Depreciation                                   2,106        2,825          1,005        1,398
  Amortization                                   1,079        1,061            552          499
  One-time foreign exchange loss and
    compensation expense for stock options          --        1,898             --           --
  Transaction costs                                 --       12,388             --        2,505
  Net investment income                           (175)        (810)           (69)        (209)
  Interest expense                               8,421        6,742          4,223        4,204
                                              --------     --------        -------      -------
Net income (loss) before provision for
  (benefit from) income taxes                 $    140     $(16,566)       $   316      $(4,753)
                                              ========     ========        =======      =======
</TABLE>
                                       11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     Bell Sports is the leading  manufacturer  and  marketer of bicycle  helmets
worldwide and a leading supplier of a broad line of bicycle accessories in North
America. The Company is also a supplier of bicycle accessories  worldwide.  Over
its 45-year  history,  the Company has  developed a reputation  for  innovation,
design, quality and safety.

RESULTS OF OPERATIONS

     NET SALES. Net sales for the second quarter of fiscal 2000 of $51.0 million
increased  13% from $45.0 in the fiscal  1999 second  quarter.  Year to date net
sales of $97.8  million  increased  14% from $85.9  million in fiscal 1999.  The
quarterly and year to date  increases are due primarily to strong U.S.  sales in
the  mass  merchant  channel.  Additional  increases  have  come  from  the U.S.
specialty retail channel and from Canadian sales.

     For the second  quarter of fiscal  2000,  bicycle  accessories  and bicycle
helmets represented approximately 51% and 49%, respectively,  of net sales. Year
to date, bicycle accessories and bicycle helmets  represented  approximately 55%
and 45%, respectively, of net sales. For the fiscal 1999 second quarter, bicycle
accessories,  bicycle helmets and auto racing helmets represented  approximately
50%, 48% and 2%, respectively, of the Company's net sales. Year to date, bicycle
accessories,  bicycle helmets and auto racing helmets represented  approximately
53%, 45% and 2%, respectively,  of net sales. In July 1999, the Company sold its
auto racing helmet business.

     GROSS MARGIN. Gross margins for the second quarter of fiscal 2000 increased
to 33% of net sales  from 32% in the prior  year  quarter.  Year to date,  gross
margins  increased to 35% of net sales from 33% in the prior year.  The increase
is mainly due to better  sourcing of  accessories  and  production  efficiencies
resulting from the manufacturing  consolidations completed by the Company in the
fiscal 1999 fourth quarter.

     SELLING,  GENERAL AND ADMINISTRATIVE.  Selling,  general and administrative
costs as a  percentage  of net sales  improved to 23% for the second  quarter of
fiscal 2000 from 27% for the prior year second quarter.  Year to date,  selling,
general and  administrative  costs as a percentage  of net sales have dropped to
25% in fiscal 2000 from 27% in fiscal  1999.  The  decrease is due to  increased
efficiency due to the Company's restructuring accomplished in the fourth quarter
of fiscal 1999.

     AMORTIZATION OF INTANGIBLES. Amortization of goodwill and intangible assets
increased  slightly to $552,000 in the Company's  second  quarter of fiscal 2000
compared  to  $499,000  for the  comparable  prior  year  period.  Year to date,
amortization  remained  constant at $1.1 million for both fiscal 2000 and fiscal
1999.

     FOREIGN  EXCHANGE.  Foreign  exchange gain of $3,000 for the second quarter
increased  from the prior  year  quarter  loss of  $330,000.  Year to date,  the
foreign  exchange loss for fiscal 2000  decreased to $12,000 from  $1,949,000 in
the prior year. The high foreign  exchange  losses in the prior year were due to
the unusually  high level of cash movement  related to the August 1998 merger of
Bell and HB Acquisition Corporation (the "Bell Merger").

     NET INVESTMENT  INCOME.  Net investment  income decreased to $69,000 in the
second  quarter of fiscal 2000  compared  to  $209,000 in the second  quarter of
fiscal 1999.  Year to date,  net  investment  income  decreased to $175,000 from
$810,000. The decrease was due to significantly lower cash balances.

     INTEREST EXPENSE. Interest expense for the second quarter of fiscal 2000 of
$4.2  million  remained  constant  from the prior year.  Year to date,  interest
expense  increased to $8.4 million from $6.7 million in the prior year. The year
to date increase is due to the higher level of debt  outstanding  for the entire
period,  as the increase in debt  occurred  midway  through the first quarter of
fiscal 1999.

                                       12
<PAGE>
     INCOME TAXES. The effective tax rate was 41% for the second quarter of both
fiscal 2000 and fiscal  1999.  Year to date the  effective  tax rate was 41% for
fiscal 2000 compared to 20% for fiscal 1999. The increase is attributable to the
non-deductibility  of certain costs  associated with the Bell Merger incurred in
the prior year.

LIQUIDITY AND FINANCIAL RESOURCES

     The Company has historically  funded its operations,  capital  expenditures
and working  capital  requirements  from internal cash flow from  operations and
borrowings. The Company's working capital increased slightly to $79.3 million at
January 1, 2000 from $74.7 million at July 3, 1999.

     The  Company's  capital  expenditures  were $1.7  million for the first six
months of fiscal  2000,  compared to $2.3  million in fiscal  1999.  The Company
estimates it will spend  approximately  $3.8 million on capital  expenditures in
fiscal 2000 for product  tooling and to maintain and upgrade its  facilities and
equipment.

     In August 1998,  the Company and BSI,  entered into a $60.0 million  senior
secured  revolving credit facility ("Credit  Agreement")  expiring on August 17,
2003. The Credit Agreement  provides for mandatory  repayments from time to time
to the extent the amount  outstanding  thereunder  exceeds  the  maximum  amount
permitted  under the  borrowing  base.  Based on the  provisions  of the  Credit
Agreement,  the Company could borrow a maximum of $55.1 million as of January 1,
2000. As of January 1, 2000, there were borrowings  outstanding of $17.0 million
under the Credit Agreement.

     The Credit  Agreement  provides  the Company  with the option of  borrowing
based  either on the U.S.  prime rate plus a margin or LIBOR plus a margin.  The
margin for the U.S.  prime rate loans can fluctuate  between 0.0% and 1.0%,  and
the  margin for LIBOR  loans can  fluctuate  between  1.0% and 2.0% based on the
Company's  earnings and debt. At January 1, 2000,  the margin for U.S. prime was
0.75% and the  margin  for LIBOR was  1.75%.  Under the  Credit  Agreement,  the
Borrower is required to pay a quarterly  commitment fee on the unused portion of
the  facility at a rate that  ranges from 0.375% to 0.50% per annum,  based on a
pricing ratio.  At January 1, 2000,  the quarterly  commitment fee was 0.50% per
annum.

     The Credit Agreement  contains  certain  financial  covenants,  including a
maximum leverage ratio, a minimum fixed charge coverage ratio and a minimum cash
interest  coverage ratio. It also contains  covenants which restrict the ability
of the Company to pay  dividends,  incur liens,  issue  certain types of debt or
equity,  engage in mergers,  acquisitions  or asset  sales,  or to make  capital
expenditures.  At January 1, 2000,  the  Company was in  compliance  with or had
obtained waivers for all bank covenants.

     Management   believes  that  cash  flows  from  operations  and  borrowings
available  under  the  Credit  Agreement  will  provide  adequate  funds for the
Company's foreseeable working capital needs, planned capital expenditures,  debt
service  obligations  and the  ultimate  outcome  of pending  product  liability
claims.  The Company does not  anticipate  paying  dividends on its Preferred or
Common Stock in the foreseeable future.

YEAR 2000 COMPLIANCE

     The Year 2000 problem,  which is common to most corporations,  concerns the
inability of information  systems,  including computer software programs as well
as  other  systems  dependent  on  computerized   information  such  as  phones,
voicemail,  security systems and elevators (collectively,  "Non-IT Systems"), to
properly  recognize and process date sensitive  information  related to the year
2000 and beyond.

                                       13
<PAGE>
     All Year 2000  efforts  with  respect to the Company and its  subsidiaries'
computer  software  programs  were made through  internal  resources and through
routine  software  upgrades  provided by the  Company's  software  vendors.  The
Company did not incur significant separately  identifiable costs related to Year
2000  issues  through  January 1, 2000 and does not expect to incur  significant
additional costs related to Year 2000 issues.  The Company's  internal resources
consist of an information  technology  support team  comprised of  approximately
fifteen full-time employees,  covering both technical and application areas. The
Company did not hire  additional  employees,  either  full-time or contract,  in
order to address Year 2000 issues.

     The Company employs certain  manufacturing  processes that utilize computer
controlled  manufacturing  equipment.  Prior to  January 1,  2000,  the  Company
determined  that such equipment was Year 2000  compliant.  The Company's  Non-IT
Systems were also determined to be Year 2000 compliant prior to January 1, 2000.
The Company utilized  internal  resources to address the Year 2000 compliance of
its Non-IT Systems and did not incur significant  separately  identifiable costs
related to Year 2000 issues through January 1, 2000 and does not expect to incur
significant additional Year 2000 costs.

     In addition to  reviewing  its  internal  systems,  the Company  polled its
outside software and other vendors,  customers and freight carriers to determine
whether they are Year 2000  compliant  and to attempt to identify any  potential
issues.  The Company's  outside software  vendors  confirmed that they were Year
2000 compliant, including the products utilized by the Company.

     As of this date, the Company has  experienced no material Year 2000 related
failures.  This  includes  both the  Company's  internal  hardware  and software
systems and the basic utility services of its providers. The Company is also not
aware of any Year 2000  related  problems  at any of its  customers  or critical
suppliers that could adversely affect its business operations.  The Company will
continue  to monitor  its own  systems  and those of its  business  partners  to
identify and address any potential risk situation related to the Year 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

     In  June  1998,  Statement  of  Financial  Accounting  Standards  No.  133,
"Accounting for Derivative  Instruments and Hedging Activities" ("SFAS 133") was
issued.  SFAS 133  establishes a new model for  accounting for  derivatives  and
hedging  activities and  supersedes  and amends a number of existing  standards.
SFAS 133 is required  to be adopted by the  Company  for fiscal year 2001.  Upon
initial  application,  all  derivatives  are  required to be  recognized  in the
statement of financial  position as either assets or liabilities and measured at
fair value.  In  addition,  all hedging  relationships  must be  reassessed  and
documented  pursuant to the  provisions  of SFAS 133.  As the  Company  does not
currently  invest in  derivatives,  the  adoption of SFAS 133 is not expected to
have a  material  effect  on  the  results  of  operations  or the  consolidated
financial statements.

FORWARD-LOOKING STATEMENTS

     Certain matters  contained herein are  forward-looking  statements that are
based on management's  beliefs as well as on assumptions made by and information
currently  available  to  management.  When used  herein,  the  words  "expect,"
"anticipate,"  "intend," "plan," "believe,"  "estimate," and similar expressions
are  intended to  identify  such  forward-looking  statements.  Such  statements
involve  known and  unknown  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:  economic and market  conditions,  competitive
activities  or  other   business   conditions,   dependence  on  key  customers,
fluctuations in sales,  profitability  or working capital,  weather  conditions,
currency fluctuations, and results of pending litigation.

                                       14
<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 17

       (b) None

                                       15
<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: February 4, 2000

                                        BELL SPORTS CORP.


                                        By: /s/ Richard S Willis
                                            --------------------------------
                                            Richard S Willis
                                            Executive Vice President, Chief
                                            Operating Officer and Chief
                                            Financial Officer (principal
                                            financial and accounting officer)

                                       16
<PAGE>
                                BELL SPORTS CORP.
                                INDEX TO EXHIBITS


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

      27*             Financial Data Schedule

----------
* Filed herewith

                                       17