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 28, 1998
                                      ---------------------------

                                       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)

                                       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        April 27, 1998        13,893,328
----------------------------        --------------        ----------------
Class                               Date                  Number of shares
                                       1
<PAGE>
                                BELL SPORTS CORP.
                               INDEX TO FORM 10-Q

                                     PART I

<TABLE>
<CAPTION>
                                                                                 Page
                                                                                Number
                                                                                ------
<S>                                                                            <C>
Bell Sports Corp. and Subsidiaries Consolidated Balance Sheets
  as of March 28, 1998 and June 28, 1997                                          3

Bell Sports Corp. and Subsidiaries Consolidated Statements of Operations
  for the nine months and three months ended March 28, 1998 and
  March 29, 1997                                                                  4

Bell Sports Corp. and Subsidiaries Consolidated Condensed Statements of
  Cash Flows for the nine months ended March 28, 1998
  and March 29, 1997                                                              5

Notes to Consolidated Financial Statements                                      6 - 12

Management's Discussion and Analysis of
  Financial Condition and Results of Operations                                13 - 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, except share data)

<TABLE>
<CAPTION>
                                                                                          March 28,     June 28,
                                                                                            1998         1997
                                                                                          ---------    ---------
                                                                                         (unaudited)
<S>                                                                                       <C>          <C>      
ASSETS

Current assets:
   Cash and cash equivalents                                                              $  25,265    $  29,008
   Accounts receivable                                                                       65,318       75,915
   Inventories                                                                               52,601       46,549
   Deferred taxes and other current assets                                                   11,228       16,048
                                                                                          ---------    ---------

         Total current assets                                                               154,412      167,520

Property, plant and equipment                                                                20,225       23,738
Goodwill                                                                                     54,760       56,471
Intangibles and other assets                                                                 17,933       21,025
                                                                                          ---------    ---------

         Total assets                                                                     $ 247,330    $ 268,754
                                                                                          =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY:

 Current liabilities:
   Accounts payable                                                                       $  10,289    $  11,299
   Accrued compensation and employee benefits                                                 3,847        3,998
   Accrued expenses                                                                          15,932       20,209
   Notes payable and current maturities of long-term debt and capital lease obligations       1,816        1,337
                                                                                          ---------    ---------
         Total current liabilities                                                           31,884       36,843

Long-term debt                                                                               86,578      106,454
Capital lease obligations and other liabilities                                               5,275        6,492
                                                                                          ---------    ---------

         Total liabilities                                                                  123,737      149,789
                                                                                          ---------    ---------
Commitments and contingencies

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 and
   outstanding:
     14,377,254 and 13,882,182 shares at March 28, 1998, respectively, and
     14,248,114 and 13,753,042 shares at June 28, 1997, respectively
                                                                                                144          143
   Additional paid-in capital                                                               143,604      142,486
   Cumulative foreign currency translation adjustments                                       (1,028)        (407)
   Accumulated deficit                                                                      (13,909)     (18,039)
                                                                                          ---------    ---------
                                                                                            128,811      124,183
   Treasury stock, at cost, 495,072 shares                                                   (5,218)      (5,218)
                                                                                          ---------    ---------

         Total stockholders' equity                                                         123,593      118,965
                                                                                          ---------    ---------

         Total liabilities and stockholders' equity                                       $ 247,330    $ 268,754
                                                                                          =========    =========
</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 28,    March 29,    March 28,    March 29,
                                                   1998         1997         1998         1997
                                                 ---------    ---------    ---------    ---------

<S>                                              <C>          <C>          <C>          <C>      
Net sales                                        $ 138,554    $ 189,267    $  52,332    $  70,575
Cost of sales                                       93,591      135,037       34,132       49,862
                                                 ---------    ---------    ---------    ---------

Gross profit                                        44,963       54,230       18,200       20,713

Selling, general and administrative expenses        34,499       45,342       11,858       15,417
(Recovery) Loss on disposal of product line         (1,300)      25,360                    25,360
Amortization of goodwill and intangible assets       1,735        2,592          533          864
Restructuring charges                                1,228        4,142                     2,675
Net investment income                               (1,381)      (2,610)        (476)        (323)
Interest expense                                     3,539        5,467        1,189        1,943
                                                 ---------    ---------    ---------    ---------

Income (loss) before income taxes                    6,643      (26,063)       5,096      (25,223)
Provision (benefit) for income taxes                 2,524       (3,649)       1,936       (3,280)
                                                 ---------    ---------    ---------    ---------

Net income (loss)                                $   4,119    $ (22,414)   $   3,160    $ (21,943)
                                                 =========    =========    =========    =========

Basic EPS                                        $    0.30    $   (1.63)   $    0.23    $   (1.60)
                                                 =========    =========    =========    =========

Diluted EPS                                      $    0.29    $   (1.63)   $    0.22    $   (1.59)
                                                 =========    =========    =========    =========

Weighted average shares outstanding:

Basic                                               13,827       13,713       13,861       13,736
Diluted                                             14,176       13,764       14,245       13,774
</TABLE>

       See accompanying notes to these consolidated financial statements.
                                       4
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                   Nine Months Ended
                                                                 ----------------------

                                                                 March 28,    March 29,
                                                                   1998         1997
                                                                 ---------    ---------

<S>                                                              <C>          <C>      
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
  Net cash provided by (used in) operating activities            $   5,070    $ (26,568)
                                                                 ---------    ---------


CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
  Capital expenditures                                              (3,610)      (5,768)
  Net sales of marketable securities                                              8,105
  Acquisition of other businesses                                                  (519)
  Proceeds from the sale of SportRack                               13,427
                                                                 ---------    ---------

     Net cash provided by investing activities                       9,817        1,818
                                                                 ---------    ---------


CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                             1,119
  Payments on notes payable, long-term debt and capital leases        (495)         831
  Net (repayments)/borrowings on line of credit agreement          (18,708)      27,603
                                                                 ---------    ---------

     Net cash provided by (used in) financing activities           (18,084)      28,434
                                                                 ---------    ---------

Effect of exchange rate changes on cash                               (546)         (69)
                                                                 ---------    ---------

Net increase (decrease) in cash and cash equivalents                (3,743)       3,615

Cash and cash equivalents at beginning of period                    29,008       23,140
                                                                 ---------    ---------

Cash and cash equivalents at end of period                       $  25,265    $  26,755
                                                                 =========    =========
</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  (the "Company" or "Bell")
design, manufacture, market and distribute bicycle accessories, bicycle helmets,
automotive racing helmets, and snowboard and ski 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 28, 1998 and consolidated  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 28, 1997, June 29, 1996 and
July 1,  1995  which  are  included  in the  Company's  1997  Annual  Report  to
Stockholders.

Investment Income
-----------------

Investment  income  reported  for the  first  quarter  of fiscal  1997  included
proceeds from the settlement of an  arbitration  case related to the handling of
certain marketable  securities by an outside investment advisor.  The settlement
proceeds,  net of related expenses and losses to sell certain  securities,  were
$1.3 million.

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

Accounts  receivable  at March 28, 1998 and June 28, 1997 are net of  allowances
for doubtful accounts of $2.3 million and $5.0 million, respectively.

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

Property,  plant and  equipment  at March 28,  1998 and June 28, 1997 are net of
accumulated depreciation of $20.5 million and $17.1 million, respectively.
                                       6
<PAGE>
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.

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

In June 1997,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting  Comprehensive
Income"  ("SFAS  139").  SFAS 130  establishes  standards  for the  reporting of
comprehensive  income  and  its  components  in a full  set  of  general-purpose
financial  statements  and is required to be adopted for fiscal years  beginning
after December 15, 1997.  Reclassification  of financial  statements for earlier
periods for comparative purposes is required.

In June 1997,  SFAS No. 131,  "Disclosures  about  Segments of an Enterprise and
Related  Information"  ("SFAS  131") was issued.  SFAS 131  revises  information
regarding the reporting of operating segments. It also establishes standards for
related  disclosures  about  products and services,  geographic  areas and major
customers.  SFAS 131 is required to be adopted for fiscal years  beginning after
December 15, 1997.

The Company will adopt SFAS 130 and SFAS 131 in fiscal 1999.


NOTE 2 - INVENTORIES

Inventories consist of the following components (in thousands):

                                       March 28,   June  28,
                                          1998        1997
                                       ---------   ---------

Raw materials                          $   5,151   $   5,865
Work in process                            2,614       2,125
Finished goods                            44,836      38,559
                                       ---------   ---------
                                       
     Total                             $  52,601   $  46,549
                                       =========   =========
                                       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. 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 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
such  claims at the  purchaser's  expense.  If the  purchaser  is for any reason
unable to pay any potential judgment, settlement amount or defense costs arising
out of any such claim,  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 arising out of any such claim.

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.

In March 1998, the Company secured a ten year policy for insurance  coverage for
motorcycle  helmets  manufactured  or  licensed  prior to June 1991.  The policy
covers up to a maximum of $25  million  per  occurrence  and $25  million in the
aggregate in excess of the  Company's  self-insured  retention of $1 million per
occurrence  in excess of all  previous  payments  made on  existing  claims,  $2
million  aggregate for known claims or $4 million aggregate for incurred but not
reported claims and new occurrences.  The policy covers all known claims, except
the judgments  described below, and any incurred but not reported claims and new
occurrences.

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.  If the judgment is upheld,
the amount of the claim for which Bell would be  responsible  and the legal fees
and tax implications  associated  therewith are estimated to be between $3.0 and
$4.0 million.

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.

On  February  20,  1998 a  Wilkes-Barre,  Pennsylvania  jury  returned a verdict
against  the  Company  relating to  injuries  sustained  in a 1993  motorcycling
accident.  The judgment  totaled $6.8 million,  excluding any interest,  fees or
costs which may be assessed.

The Company intends to file  post-trial  motions to set aside the jury's verdict
and to appeal any  judgment  against  the  Company  that might be entered in the
action.  Because the ultimate outcome of the matter,  and amounts,  if any, that
the Company might be required to pay cannot be determined, no reserves have been
established.
                                       8
<PAGE>
Shareholder Litigation
----------------------

In February 1998, a purported stockholder of the Company filed a lawsuit, on his
own  behalf  and on behalf of a  purported  class of all  Company  stockholders,
against the Company,  HB Acquisition  Corporation,  Chase Capital  Partners,  CB
Capital Investors and the Company's directors in the Chancery Court of the State
of Delaware. The complaint alleges, among other things, that the proposed merger
is unfair to the Company's public  stockholders and that certain  defendants who
are  expected to exchange a portion of their Bell equity  interest for equity in
HB Acquisition Corporation in connection with the transaction have a conflict of
interest  which has caused them,  and the Company's  directors,  to breach their
fiduciary  duties to the Company's  stockholders.  This class action lawsuit has
been withdrawn by the plaintiff, without prejudice to refile.

Two  additional  purported  class  action  lawsuits  have been filed in Delaware
Chancery  Court which seek to enjoin the  merger.  The  complaints  in these two
actions name the Company, HB Acquisition Corporation, Chase Capital Partners and
the Company's  directors as defendants.  The allegations in these complaints are
substantially  similar,  alleging,  among other things, that the defendants have
breached their fiduciary duties to the Company's stockholders in connection with
the proposed merger. The Company believes that the allegations  contained in the
complaints are without merit and intends to vigorously defend these actions.

Environmental Litigation
------------------------

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  (the  "State")  filed a  complaint  with  the  Illinois
Pollution Control Board (the "Pollution  Control Board") against the Company and
the disposal  site owner based on the same  allegations.  The  complaint  sought
penalties  not  exceeding  statutory  maximums  and  such  other  relief  as the
Pollution  Control Board  determines to be  appropriate.  The Pollution  Control
Board 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 disposal site at an authorized disposal facility.

In addition to the State's  claim,  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 disposal site owner has altered
its argument in support of its  cross-claim  by asserting that if it is required
to meet any new or  enhanced  closure  requirements  as a result of the  State's
claim against the landfill, which is still pending, the costs of such additional
closure  requirements  should be imposed on the Company. At this time, it is not
possible to  determine  the outcome of the  cross-claim  or whether the disposal
site owner will be required to meet any new or enhanced closure requirements.


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

The  Company  has a total of  approximately  $89.5  million  in  notes  payable,
long-term debt and capital lease  obligations  outstanding at March 28, 1998. Of
this amount,  $86.25 million relates to the outstanding balance on the Company's
4-1/4%  convertible  subordinated  debentures.  Maturing  November 15, 2000, the
debentures are  convertible at any time prior to maturity into common stock 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 April 1997, the Company  entered into a $60.0 million  multicurrency  secured
revolving line of credit ("Credit  Agreement").  The 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 Credit  Agreement  requires
borrowings  outstanding  under the line of credit to be  maintained  below $15.0
million for a period of thirty  consecutive  days between July 1st and September
30th of each fiscal year.
                                       9
<PAGE>
Borrowings under the Credit Agreement were reduced  approximately  $20.0 million
during the fiscal 1998 first quarter  using the proceeds  received from the sale
of SportRack (see Note 7) and the  collection of  receivables,  including  those
related to the Service Cycle/Mongoose business. At March 28, 1998, there were no
outstanding borrowings under the Credit Agreement.

The Credit  Agreement  expires in December 1999 and is classified as a long-term
liability. Based on the provisions of the Credit Agreement at March 28, 1998 the
Company could borrow a maximum of $36.8 million.

The Credit  Agreement  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  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 28, 1998,  the quarterly  commitment fee was
0.30% per annum.

The 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. At March 28, 1998 and
June 28, 1997,  the Company was in compliance  with all of the Credit  Agreement
covenants.


NOTE 5 - COMMON STOCK

The Company granted its executive officers,  non-employee  directors and certain
other  employees  options to purchase  shares of the Company's  Common Stock. At
March 28, 1998,  options to purchase  approximately 2.3 million 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 - EARNINGS PER SHARE

In December 1997,  the Company  adopted SFAS No. 128,  "Earnings Per Share.  All
historical  earnings per share information has been restated as required by SFAS
128.

Basic  earnings per share excludes  dilution and is computed by dividing  income
available  to  common  stockholders  by  the   weighted-average   common  shares
outstanding   for  the  period.   Diluted   earnings  per  share   reflects  the
weighted-average   common  shares  outstanding  plus  the  potential  effect  of
securities or contracts  which are convertible to common shares such as options,
warrants,  and convertible debt and preferred  stock. In computing  Diluted EPS,
the  average  stock  price for the period is used in  determining  the number of
shares  assumed to be purchased  from exercise of stock options  rather than the
higher of the average or ending stock price as used in the  computation of fully
diluted EPS.
                                       10
<PAGE>
The  following  is a  reconciliation  between  the  components  of the basic and
diluted net income (loss) per share calculations for the periods presented below
(in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                             Nine Months Ended:
                                              March 28, 1998                    March 29, 1997
                                      ------------------------------    -------------------------------
                                       Income     Shares      Per        Loss       Shares      Per
                                                             Share                             Share
                                                             Amount                            Amount
                                      --------   --------   --------   ---------   --------   ---------
<S>                                   <C>          <C>      <C>        <C>           <C>      <C>      
Basic income (loss) per share
     Net income (loss)                $  4,119     13,827   $   0.30   $(22,414)     13,713   $  (1.63)
                                                            ========                          ========
Effect of dilutive securities
     Stock options                                    349                                51

                                      --------   --------              --------    --------
Diluted net income (loss) per share
     Net income (loss) plus assumed
     exercises and conversions        $  4,119     14,176   $   0.29   $(22,414)     13,764   $  (1.63)
                                      ========   ========   ========   ========    ========   ========
</TABLE>


<TABLE>
<CAPTION>
                                                            Three Months Ended:
                                              March 28, 1998                    March 29, 1997
                                      ------------------------------    -------------------------------
                                       Income     Shares      Per        Loss       Shares      Per
                                                             Share                             Share
                                                             Amount                            Amount
                                      --------   --------   --------   ---------   --------   ---------
<S>                                   <C>          <C>      <C>        <C>           <C>      <C>      
Basic income (loss) per share
     Net income (loss)                $  3,160     13,861   $   0.23   $(21,943)     13,736   $  (1.60)
                                                            ========                          ========
Effect of dilutive securities
     Stock options                                    384                                38
                                      --------   --------              ---------   --------

Diluted net income (loss) per share
     Net income (loss) plus assumed
     exercises and conversions        $  3,160     14,245   $   0.22   $(21,943)     13,774   $  (1.59)
                                      ========   ========   ========   ========    ========   ========
</TABLE>


The 4-1/4% convertible subordinated debentures are excluded from the above table
since their effect would be antidilutive.
                                       11
<PAGE>
NOTE 7 - DISPOSITIONS

On July 2, 1997,  the Company  completed  the sale of  substantially  all of the
assets of SportRack,  which designs,  manufactures  and markets  automobile roof
rack  systems,  for  approximately  $13.5  million  to an  affiliate  of Advance
Accessory System Canada, Inc. There was no material gain or loss associated with
this transaction.


NOTE 8 - LOSS (RECOVERY) ON DISPOSAL OF PRODUCT LINE 

In April 1997, the Company disposed of the Service  Cycle/Mongoose  business but
retained the related accounts  receivable of approximately  $19 million.  At the
date of the  disposition,  the  Company  recorded a reserve of $2.5  million for
estimated  uncollectible  receivables.  The  Company  subsequently  collected  a
majority of the receivables and  accordingly,  the Company reversed $1.3 million
of uncollectible receivable reserves during its fiscal 1998 second quarter.


NOTE 9 - RESTRUCTURING CHARGES

In November  1997,  the Company  formed and approved a plan to  restructure  its
European operations. In connection with this plan, the Company closed its Paris,
France sales and  marketing  office in  December,  1997 and  consolidated  these
functions  with its  Roche  La  Moliere,  France  facility.  The key  management
positions  of Giro  Ireland and  EuroBell  were also  consolidated.  Included in
fiscal  1998  second  quarter  pre-tax  income  are $1.2  million  of  estimated
restructuring charges related to this plan, including facility closing costs and
severance benefits.


NOTE 10 - MERGER

In April 1998, the Company  announced it had entered into an amended  definitive
recapitalization and merger agreement with HB Acquisition Corporation, providing
for a cash  merger in which the  shares of  common  stock of Bell  Sports  Corp.
outstanding  immediately prior to the merger will be converted into the right to
receive  $10.25  per  share  in  cash.  HB  Acquisition  Corporation  is a newly
organized  corporation  formed by Harvard  Private  Capital  Holdings,  Inc. and
Brentwood  Associates Buyout Fund II, L.P. It is currently expected that Mary J.
George,  President of Bell Sports Corp.,  and Chase Capital Partners will invest
in the new  corporation  by  exchanging,  prior to the merger,  a portion of the
shares,  stock options or other stock based awards of Bell Sports Corp.  held by
them for capital shares of HB Acquisition Corporation.

The  definitive  agreement  has been  approved by the Board of Directors of Bell
Sports Corp., based upon the unanimous  recommendation of a special committee of
its independent directors.

The  consummation  of the merger is subject  to  certain  conditions,  including
regulatory approvals, the approval of the Company's stockholders and the receipt
by HB Acquisition Corporation of certain necessary financing.
                                       12
<PAGE>
                                     Item 2.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL POSITION AND LIQUIDITY

The Company's  current ratio increased to 4.8 to 1 at March 28, 1998 from 4.5 to
1 at June 28, 1997.  Cash and cash  equivalents  decreased $3.7 million to $25.3
million at March 28, 1998 from $29.0  million at June 28, 1997.  The decrease in
cash and cash  equivalents  is primarily due to the  Company's  reduction of its
outstanding  borrowings,  mainly financed by the proceeds received from the sale
of the SportRack business in July 1997 (the "Sale of SportRack).

Accounts  receivable at March 28, 1998 decreased  $10.6 million to $65.3 million
from  $75.9  million at June 28,  1997.  The  decrease  is  attributable  to the
approximate  $6.0  million  in  receivables  collected  related  to the  Service
Cycle/Mongoose  business and the $5.0 million decrease in receivables  resulting
from the Sale of  SportRack.  Although the Service  Cycle/Mongoose  business was
sold in April 1997, the Company retained the receivables related to the business
unit.

Inventories  increased  $6.1 million to $52.6 million at March 28, 1998 compared
to $46.5  million at June 28, 1997.  This  increase is  attributed to the normal
business cycle build-up of inventory to meet anticipated increased sales demands
in the last quarter of the fiscal year. The increase was partially offset by the
Sale of SportRack,  which accounted for approximately  $4.2 million in inventory
at June 28, 1997.

In April 1997, the Company entered into a $60.0 million  multicurrency,  secured
revolving line of credit ("Credit  Agreement").  The 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 Credit  Agreement  requires
borrowings  outstanding  under the line of credit to be  maintained  below $15.0
million for a period of thirty  consecutive  days between July 1st and September
30th of each fiscal year.

Borrowings under the Credit Agreement were reduced  approximately  $20.0 million
during the fiscal 1998 first quarter  using the proceeds  received from the Sale
of SportRack and the collection of  receivables,  including those related to the
Service  Cycle/Mongoose  business.  At March 28, 1998, there were no outstanding
borrowings under the Credit Agreement.

The Credit  Agreement  expires in December 1999 and is classified as a long-term
liability. Based on the provisions of the Credit Agreement at March 28, 1998 the
Company could borrow a maximum of $36.8 million.

The Credit  Agreement  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  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 28, 1998,  the quarterly  commitment fee was
0.30% per annum.

The 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. At March 28, 1998 and
June 28, 1997,  the Company was in compliance  with all of the Credit  Agreement
covenants.

Capital expenditures were $3.5 million for the first nine months of fiscal 1998.
The Company expects to spend an additional $1.5 million on capital  expenditures
during the fiscal 1998 fourth quarter, primarily for new product tooling.

The Company announced in September 1997 that it retained Nations Banc Montgomery
Securities  LLC as its  financial  advisor to assist the  Company in  evaluating
strategic alternatives designed to enhance stockholder value. As a part of
                                       13
<PAGE>
such study,  Nations Banc  Montgomery  Securities  LLC solicited  indications of
interest in the Company from various potentially interested parties. In February
1998,  the  Company  entered  into  a  definitive  recapitalization  and  merger
agreement with HB Acquisition  Corporation  which was amended in April 1998. The
amendment provides for a cash merger in which the shares of common stock of Bell
Sports Corp. outstanding  immediately prior to the merger will be converted into
the right to receive $10.25 per share in cash. HB  Acquisition  Corporation is a
newly organized corporation formed by Harvard Private Capital Holdings, Inc. and
Brentwood Associates Buyout Fund II, L.P. It is currently contemplated that Mary
J. George,  President of Bell Sports  Corp.,  and Chase  Capital  Partners  will
invest in the new corporation by exchanging,  prior to the merger,  a portion of
the shares,  stock options or other stock based awards of Bell Sports Corp. held
by them for capital shares of HB Acquisition Corporation.

The  definitive  agreement  has been  approved by the Board of Directors of Bell
Sports Corp., based upon the unanimous  recommendation of a special committee of
its independent directors.

The  consummation  of the merger is subject  to  certain  conditions,  including
regulatory approvals, the approval of the Company's stockholders and the receipt
by HB Acquisition Corporation of certain necessary financing.

The Company  believes its available  cash flows from  operations  and the Credit
Agreement  should be adequate to satisfy its  working  capital  requirements  in
fiscal 1998.  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 litigation,  competitive actions, loss of
significant  customers,  timing of major  customer  shipments,  adverse  weather
conditions, retail environment, economic conditions and currency fluctuations.


RESULTS OF OPERATIONS

The Company completed the sale of Service  Cycle/Mongoose on April 28, 1997 (the
"Sale of Service  Cycle/Mongoose"),  and the Sale of  SportRack on July 2, 1997.
Accordingly,  to enhance the  comparability  of the current  year and prior year
amounts,  certain  prior year amounts  (where noted below) have been adjusted to
exclude the activity of the Service Cycle/Mongoose and SportRack businesses.

         Net Sales.  Net sales  decreased  $18.3 million to $52.3 million during
the three months  ended March 28, 1998 as compared to $70.6  million in the same
period  of  fiscal  1997  --  primarily  the  result  of  the  Sale  of  Service
Cycle/Mongoose  and the Sale of  SportRack.  Net sales for the third  quarter of
fiscal 1998  decreased by 6% when compared to net sales of $55.4 million for the
same   period  of  fiscal  1997  after   adjusting   for  the  Sale  of  Service
Cycle/Mongoose and the Sale of SportRack.  Sales to mass merchants decreased 14%
for the quarter partially due to the Company's  planned  elimination of selected
low margin  products from its sales mix.  Sales to the specialty  retail channel
for the quarter  increased 5% due to strong demand for specialty  helmets.  On a
year-to-date basis net sales decreased 27% to $138.6 million from $189.3 million
in the previous year. After adjusting for the Sale of Service Cycle/Mongoose and
the Sale of SportRack,  net sales  year-to-date  have decreased only 2% from the
prior year. Year-to-date sales to the specialty retail channel increased 6% from
the prior year, but were offset by an 8% decrease in mass merchant  sales.  This
decrease was caused by an inventory  adjustment made by a mass merchant customer
in the first  quarter of fiscal  1998 to reduce  stock from a five week to three
week supply, as well as the elimination of certain low margin products.
                                       14
<PAGE>
The product line sales mix,  excluding  the sales of the Service  Cycle/Mongoose
and  SportRack  businesses,  for the nine month and three  month  periods are as
follows:

                                  Nine months ended        Three months ended
                               ----------------------    ----------------------

                               March 28,    March 29,    March 28,    March 29,
                                 1998         1997         1998         1997
                               ---------    ---------    ---------    ---------
Product Line Sales Mix:
     Bicycle accessories          52%          55%          50%          53%
     Bicycle helmets              45%          43%          48%          45%
     Auto Racing helmets           3%           2%           2%           2%

The Company  anticipates  lower net sales in fiscal 1998 than those  achieved in
fiscal  1997,  due to the  Sale  of  Service  Cycle/Mongoose  and  the  Sale  of
SportRack,  which combined  contributed $50.8 million to net sales during fiscal
1997. In addition, the Company expects comparable sales to slightly decrease due
to the Company's  planned  elimination of selected low margin  products from its
sales mix.

         Gross Margin.  Gross margins were 35% of net sales in the third quarter
compared to 29% for the same period in the prior year. The increase is primarily
due to the Sale of Service Cycle/Mongoose,  which carried lower margins than the
Company's other core  businesses.  Gross margins,  when adjusted for the Sale of
Service  Cycle/Mongoose and the Sale of SportRack,  were 32% of net sales in the
third quarter of fiscal 1997. The increase is also  partially  attributed to the
elimination of selected low margin  products from the Company's sales mix. Gross
margins for the first nine  months of fiscal  1998 were 32%  compared to 29% for
the same period in the prior year. Gross margins,  when adjusted for the Sale of
Service Cycle/Mongoose and the Sale of SportRack,  were 31% of net sales for the
first nine  months of fiscal  1997.  Year-to-date,  gross  margins  for  bicycle
accessories  increased 100 basis points due to lower freight and product  costs,
and the elimination of certain low margin products.  These increases were offset
by a decrease in helmet  margins caused by a mix shift of sales volumes to lower
price point helmets.  The Company  anticipates  gross margins will remain in the
low 30% range for the foreseeable future.

         Selling,    General   and   Administrative.    Selling,   general   and
administrative  costs  increased  to 23% of net  sales in the third  quarter  of
fiscal  1998,  as compared  to 22% in the third  quarter of fiscal  1997.  After
adjusting for the Sale of Service Cycle/Mongoose and the Sale of SportRack,  the
year-to-date  adjusted selling,  general and  administrative  costs were 25% for
fiscal 1998, as compared to 26% for the prior year. The year-to-date improvement
is a result of the Company's restructuring activities and management's concerted
effort to reduce the Company's overall cost structure.  Actual selling,  general
and  administrative  expenses were 22% of net sales,  or $15.4 million,  for the
third quarter of fiscal 1997, and 24% of net sales,  or $45.4  million,  for the
first nine months of fiscal 1997.

As a result of the  seasonality of the Company's  business,  sales are generally
higher in the last half of the fiscal year.  Although some selling,  general and
administrative  expenses are variable with sales, such as distribution  expenses
and  commissions,  most  expenses  are  incurred  evenly  throughout  the  year.
Accordingly,  the Company  expects  that  selling,  general  and  administrative
expenses  will  continue to decrease as a percent of net sales during the fourth
quarter of fiscal 1998.

         Amortization  of  intangibles.  Amortization of goodwill and intangible
assets decreased to $533,000 in the third quarter and $1.7 million  year-to-date
during fiscal 1998  compared to $864,000 in the second  quarter and $2.6 million
year-to-date during fiscal 1997. The decrease is a result of the Sale of Service
Cycle/Mongoose and the Sale of SportRack.

         Restructuring Charges. Restructuring charges of $1.2 million related to
the European  operations  impacted the second quarter  fiscal 1998 results.  The
Company closed its Paris,  France sales and marketing  office in December,  1997
and consolidated these functions with its Roche La Moliere, France facility. The
key management positions of Giro Ireland and EuroBell were also consolidated.
                                       15
<PAGE>
Restructuring  charges of $4.1 million related to the fiscal 1996 organizational
and office  consolidations  impacted  the  results  for the first nine months of
fiscal 1997. These consolidation  activities were substantially completed during
the second  quarter of fiscal  1997 and  yielded an  estimated  $5.0  million in
annual cost savings.

         Loss  (Recovery)  on  Disposal  of Product  Line . In April  1997,  the
Company disposed of the Service Cycle/Mongoose business but retained the related
accounts   receivable  of  approximately  $19  million.   At  the  date  of  the
disposition,  the  Company  recorded a reserve  of $2.5  million  for  estimated
uncollectible receivables.  The Company subsequently collected a majority of the
receivables and accordingly,  the Company reversed $1.3 million of uncollectible
receivable reserves during its fiscal 1998 second quarter.

         Net investment  income and interest  expense.  Net investment income of
$476,000  for the  third  quarter  of  fiscal  1998  was  relatively  stable  in
comparison  to the $323,000 of net  investment  income  earned  during the third
quarter of fiscal 1997.  Year-to-date,  however, net investment income decreased
to $1.4  million  in the first  nine  months of fiscal  1998,  compared  to $2.6
million in the first nine  months of fiscal  1997.  The  decrease  is due to the
settlement of an arbitration case related to the handling of certain  marketable
securities  by an outside  investment  advisor in fiscal  1997.  The  settlement
proceeds, net of related expenses and losses to sell certain securities, of $1.3
million were included in net investment income in the fiscal 1997 first quarter.
Interest  expense  decreased  to $1.2  million  for the third  quarter  and $3.5
million for the first nine months of fiscal  1998,  compared to $1.9 million and
$5.5 million for the comparable prior year periods. The declines are a result of
lower levels of debt outstanding during fiscal 1998.

         Income taxes.  The effective tax rate was 38% for the third quarter and
first nine months of fiscal 1998, and 39% and 40%,  respectively,  for the third
quarter and first nine months of fiscal 1997.

         Net income and weighted average shares.  Net income for the fiscal 1998
third  quarter was $3.2  million (or $0.23 per share)  compared to a net loss of
$21.9  million  (or $1.60 per share) for the prior year third  quarter.  For the
nine month period  ended March 28,  1998,  net income was $4.1 million (or $0.30
per share)  compared to a net loss of $22.4 million (or $1.63 per share) for the
same period of the prior year. The improvement in quarterly and year-to-date net
income  is  attributable  to a  $25.4  million  loss  on  the  Sale  of  Service
Cycle/Mongoose  in the  fiscal  1997  third  quarter,  as well as  restructuring
charges of $2.3  million  and $4.1  million,  respectively,  for the fiscal 1997
third quarter and the first nine months of fiscal 1997.

The weighted  average number of shares  outstanding  for the three month periods
ended  March 28, 1998 and March 29,  1997 were 13.9  million  and 13.7  million,
respectively.  Year-to-date  outstanding  shares for fiscal 1998 and fiscal 1997
were 13.8 million and 13.7 million, respectively.
                                       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 18

          (b)   Current Report on Form 8-K dated February 17, 1998
                Current Report on Form 8-K dated April 8, 1998
                                       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:    April 30, 1998


                           BELL SPORTS CORP.

                           /s/ Linda K. Bounds 
                           ----------------------
                               Linda K. Bounds
                               Senior Vice President and Chief Financial Officer
                               (Principal financial and accounting officer)
                                       18
<PAGE>
                                BELL SPORTS CORP.
                                INDEX TO EXHIBITS


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

10.1*    Amended and  Restated  Employment  Agreement  dated  February  17, 1998
         between Registrant, Bell Sports, Inc. and Terry G. Lee.

10.2*    Amended and  Restated  Employment  Agreement  dated  February  17, 1998
         between Registrant, Bell Sports, Inc. and Mary J. George.

10.3*    Memorandum  of  Understanding   dated  January  28,  1998  between  the
         Registrant and Linda K. Bounds

10.4*    Promissory Note dated April 8, 1998 between Bell Sports, Inc., and Bill
         Bracy.

10.5*    Collateral  Pledge  Agreememt  dated April 8, 1998 between Bell Sports,
         Inc. and Bill Bracy.

27*      Financial Data Schedule









----------------------------------

* Filed herewith
                                       19