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        December 28, 1996
                                      ------------------------------

                                       OR
|_|          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
             EXCHANGE ACT OF 1934

For the transition period from _______________ to ____________

                         Commission file number 0-19873
                                               ---------

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


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

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

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

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

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was  required to file such  reports)  Yes _X_ No___ and (2) has been
subject to such filing requirements for the past 90 days. Yes _X_ No ___ .

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Common Stock, $.01 par value          February 10, 1997            13,723,214
----------------------------          ------------------        ----------------
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 December 28, 1996 and June 29, 1996                                                          3

Bell Sports Corp. and Subsidiaries Consolidated Statements of Operations
  for the six months and three months ended December 28, 1996 and
  December 30, 1995
                                                                                                     4

Bell Sports Corp. and Subsidiaries Consolidated Condensed Statements of Cash Flows
  for the six months ended December 28, 1996 and December 30, 1995                                   5

Notes to Consolidated Financial Statements                                                      6 - 10

Management's Discussion and Analysis of
  Financial Condition and Results of Operations                                                11 - 13



                                     PART II

Items 1 to 6                                                                                        14

Signatures                                                                                          15
</TABLE>
                                       2
<PAGE>
PART 1.  Financial Information
Item 1.           Financial Statements

                       BELL SPORTS CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                  December 28,            June 29,
                                                                                      1996                 1996
                                                                                      ----                 ----
                                                                                  (unaudited)
<S>                                                                               <C>                 <C>     
ASSETS
------
Cash and cash equivalents                                                             $ 28,424            $ 23,140
Marketable securities                                                                      ---               7,996
Accounts receivable                                                                     67,190              75,651
Inventories                                                                             71,727              59,413
Other current assets                                                                    19,580              17,285
                                                                                  -------------       -------------
             Total current assets                                                      186,921             183,485

Property, plant and equipment                                                           26,044              24,722
Goodwill                                                                                70,202              71,245
Intangibles and other assets                                                            18,939              19,183
                                                                                  -------------       -------------
              Total assets                                                            $302,106            $298,635
                                                                                  =============       =============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable                                                                      $  9,742            $ 11,797
Accrued expenses                                                                        13,042              16,752
Accrued compensation and employee benefits                                               4,118               4,392
Notes payable and current maturities of long-term
     debt and capital lease obligations                                                  3,011               1,070
                                                                                  -------------       -------------
             Total current liabilities                                                  29,913              34,011

Long-term debt and capital lease obligations                                           131,732             124,501
Other liabilities                                                                        4,177               4,082
                                                                                  -------------       -------------
             Total liabilities                                                         165,822             162,594
                                                                                  -------------       -------------

Stockholders' equity:
Preferred stock; $.01 par value; authorized
     1,000,000 shares, none issued
Common stock; $.01 par value; authorized 25,000,000 shares,
     issued 14,224,360 shares; outstanding 13,700,960 shares                               142                 142
Additional paid-in capital                                                             141,809             141,647
Unrealized holding losses on marketable securities                                         ---                (461)
Foreign currency translation adjustments                                                   176                  84
(Accumulated deficit) Retained earnings                                                   (326)                146
                                                                                  -------------       -------------
                                                                                       141,801             141,558
 Less-523,400 shares of common stock in treasury, at cost                               (5,517)             (5,517)
                                                                                  -------------       -------------
             Total stockholders' equity                                                136,284             136,041
                                                                                  -------------       -------------
             Total liabilities and stockholders' equity                               $302,106            $298,635
                                                                                  =============       =============
</TABLE>
       See accompanying notes to these consolidated financial statements.
                                       3
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (unaudited; in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                 Six Months Ended                    Three Months Ended
                                                         ---------------------------------      ----------------------------

                                                             Dec. 28,          Dec. 30,           Dec. 28,       Dec. 30,
                                                               1996              1995               1996           1995
                                                         ----------------   --------------      -----------   --------------
<S>                                                      <C>                <C>               <C>              <C>    
Net sales                                                       $118,691         $113,890          $56,623          $56,215
Cost of sales                                                     85,177           95,313           40,617           47,773
                                                         ----------------   --------------      -----------   --------------

    Gross profit                                                  33,514           18,577           16,006            8,442

Selling, general and administrative expenses                      29,926           30,360           14,647           15,771
Amortization of goodwill and intangible assets                     1,729            1,181              867              594
Restructuring charges                                              1,466            1,057              108              670
Net investment (income)                                           (2,292)          (1,962)            (500)            (930)
Interest expense                                                   3,526            4,324            1,730            2,007
                                                         ----------------   --------------      -----------   --------------

Loss before income taxes                                            (841)         (16,383)            (846)          (9,670)
Benefit from income taxes                                           (369)          (3,289)            (371)          (1,946)
                                                         ----------------   --------------      -----------   --------------
Net loss                                                           ($472)        ($13,094)           ($475)         ($7,724)
                                                         ================   ==============      ===========   ==============

Net loss per common
  and common equivalent shares                                    ($0.03)          ($0.94)          ($0.03)          ($0.56)
                                                         ================   ==============      ===========   ==============


Weighted average number of common and
  common equivalent shares outstanding                            13,759           13,944           13,764           13,757
                                                         ================   ==============      ===========   ==============
</TABLE>
       See accompanying notes to these consolidated financial statements.
                                       4
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (unaudited; in thousands)
<TABLE>
<CAPTION>
                                                                                          Six Months Ended
                                                                               ------------------------------------
                                                                                 December 28,        December 30,
                                                                                    1996                1995
                                                                                    ----                ----
<S>                                                                            <C>                 <C>          
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net cash used in operating activities                                             $   (7,353)         $    (23,412)
                                                                               --------------      ----------------

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
  Capital expenditures                                                                (4,479)               (3,774)
  Net sale of marketable securities                                                    8,105                20,580
  Acquisition of other businesses                                                       (519)               (1,660)
                                                                               --------------      ----------------
Net cash provided by investing activities                                              3,107                15,146
                                                                               --------------      ----------------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
  Proceeds from issuance of stock                                                       ---                     23
  Treasury stock purchases                                                              ---                 (5,517)
  Payments on notes payable, long-term debt and capital leases                          (784)                 (732)
  Advances taken on credit lines                                                      31,186                 2,305
  Payments made on credit lines                                                      (21,000)              (25,493)
                                                                               --------------      ----------------
Net cash provided by (used in) financing activities                                    9,402               (29,414)
                                                                               --------------      ----------------

Effect of exchange rate changes on cash                                                  128                   (52)
                                                                               --------------      ----------------

Net increase (decrease) in cash and cash equivalents                                   5,284               (37,732)
Cash and cash equivalents at beginning of period                                      23,140                72,018
                                                                               --------------      ----------------
Cash an cash equivalents at end of period                                         $   28,424          $     34,286
                                                                               ==============      ================
</TABLE>
       See accompanying notes to these consolidated financial statements.
                                       5
<PAGE>
                       BELL SPORTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

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

The  consolidated  balance  sheet as of  December  28,  1996 and  statements  of
operations and condensed cash flows for all periods included in the accompanying
financial  statements have not been audited.  In the opinion of management these
financial statements include all normal and recurring  adjustments necessary for
a fair presentation of such financial information. The results of operations for
the interim periods are not necessarily  indicative of the results of operations
to be expected for the full year.

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

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

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

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

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

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

Accounts receivable at December 28, 1996 and June 29, 1996 are net of allowances
for doubtful accounts of $2.9 million and $3.4 million, respectively.

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

Property,  plant and equipment at December 28, 1996 and June 29, 1996 are net of
accumulated depreciation of $16.9 million and $14.1 million, respectively.

NOTE 2 - INVENTORIES

Inventories consist of the following:

                                               December 28,          June 29,
(in thousands)                                    1996                 1996
                                                  ----                 ----

Raw materials                                  $  6,544             $  5,330
Work in process                                   2,505                2,315
Finished goods                                   62,678               51,768
                                                 ------               ------

                                                $71,727               $59,413
                                                =======               =======
                                       7
<PAGE>
NOTE 3 - PRODUCT LIABILITY AND CONTINGENCIES

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

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

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

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

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

Environmental 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  seeks
penalties  not  exceeding  statutory  maximums  and  such  other  relief  as the
Pollution Control Board determines appropriate.  The disposal site owner filed a
cross-claim  against the Company that seeks to have penalties  assessed  against
the Company and not against the disposal  site owner.  Any penalties as a result
of the cross-claim would be payable to the State. The State and the Company have
agreed in principle to a settlement in which the Company will pay $69,000 to the
State. The Company is seeking dismissal of the cross-claim on several grounds.
                                       8
<PAGE>
Additionally,  the Illinois Agency has been  negotiating  with the disposal site
owner with respect to the procedures and actions necessary to close the disposal
site.  The extent  and  nature of any  actions  which may be taken  against  the
Company with respect to closure of this site cannot presently be determined.


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



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

The Company has approximately $135 million in notes payable,  long-term debt and
capital  lease  obligations  outstanding  at December 28, 1996.  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  into common stock at any time prior to maturity at a conversion
price of $54.06 per share. Interest on the debentures is payable  semi-annually.
The debentures  are  redeemable at the Company's  option at any time on or after
November 15, 1996, at specified redemption prices.

In  February  1996,  the  Company  entered  into a $100  million  multicurrency,
revolving line of credit (the "Revolving  Credit") with a syndicated bank group.
At December 28, 1996, a total of $43.0 million was outstanding  under the credit
facility.

The Revolving Credit,  which expires in December 1999, provides the Company with
several  interest  rate  options,  including  U.S.  prime,  LIBOR plus a margin,
Canadian prime plus the applicable  LIBOR margin less 0.50%,  Canadian  banker's
acceptance plus the LIBOR margin plus 0.125%, and short-term fixed rates offered
by the agent bank in the loan  syndication.  The LIBOR margin is currently 1.25%
per annum,  but it can range between 0.75% and 1.50%  depending on the Company's
interest coverage ratio.  Under the Revolving Credit, the Company is required to
pay a quarterly  commitment  fee on the unused portion of the facility at a rate
that ranges from 0.15% to 0.30% per annum.  At December  28, 1996 the  quarterly
commitment fee was 0.25% per annum.

The Revolving Credit contains certain financial covenants,  the most restrictive
of which are a minimum interest  coverage ratio, a maximum funded debt ratio and
a minimum  consolidated  tangible net worth amount.  The  Revolving  Credit also
contains covenants that restrict the amount of cash dividends payable as well as
the amount that the Company can repurchase of its  subordinated  debt and common
stock.

In August,  1996,  the  Company  amended  the  Revolving  Credit to grant to the
syndicated  bank group a  security  interest  in U.S.  accounts  receivable  and
inventories.  The security  interest is subject to automatic release by the bank
group upon the achievement of certain  financial ratios after September 1, 1997.
The  amendment,  among other things,  waived a default in the interest  coverage
ratio covenant as of June 29, 1996.
                                       9
<PAGE>
NOTE 5 - COMMON STOCK

From  time  to  time,  the  Company  has  granted  to  its  executive  officers,
non-employee directors and certain other employees options to purchase shares of
the  Company's   Common  Stock.   At  December  28,  1996  options  to  purchase
approximately 2,021,000 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.  As of January  1997,  the  Company  had
repurchased  a total  of  523,400  shares  at an  aggregate  purchase  price  of
approximately  $5.5  million.  Shares  repurchased  may be  retired  or used for
general corporate purposes.

NOTE 6 - RESTRUCTURING CHARGES

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

During fiscal 1996, the Company commenced significant  organizational and office
consolidations including closing the Cerritos,  Providence,  Commack and Calgary
offices. Most U.S. sales, marketing and research and development operations were
consolidated in San Jose,  California and all corporate functions in Scottsdale,
Arizona. Substantially all of the Canadian operations were consolidated into one
facility in Granby,  Quebec.  Included in the first half of fiscal 1997  pre-tax
income  are $1.5  million  of  restructuring  charges  related  to the  Program,
including facility closing costs, severance benefits and relocation expenses.

The  following  table sets forth the details of activity  during fiscal 1997 for
restructuring charges:
<TABLE>
<CAPTION>
(in thousands)                                       Accrual at     Restructuring       Cash           Accrual at
                                                      June 29,        Charges        Payments         December 28,
                                                       1996                                              1996
                                                  ------------------------------------------------------------------
<S>                                               <C>                 <C>             <C>                <C>   
Lease payments and other facility expenses            $   942         $   338         ($  524)           $  756
Severance and other related benefits                    2,832             382          (2,263)              951
Relocation and other                                    1,383             746          (1,466)              663
                                                  ------------------------------------------------------------------
    Total                                             $ 5,157         $ 1,466         ($4,253)           $2,370
                                                  ==================================================================
</TABLE>
                                       10
<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 6.2 to 1 at December 28, 1996 from 5.4
to 1 at June 29, 1996. Cash and current marketable securities decreased to $28.4
million at December 28, 1996 from $31.1  million at June 29,  1996.  The decline
primarily relates to cash used in operations.

Accounts  receivable  at December 28, 1996  declined  $8.5 million from June 29,
1996,  due to the  collection of  receivables  in the normal course of business.
Inventories  increased  $12.3  million in fiscal 1997 compared to the balance at
June 29, 1996. The increase is attributed to the normal  business cycle in which
inventory  is built up in the  first  half of the  fiscal  year in order to meet
anticipated sales demands in the second half of the fiscal year.

In February  1996,  the Company  entered  into a $100.0  million  multicurrency,
revolving line of credit (the "Revolving  Credit") with a syndicated bank group.
This facility  replaces prior revolving credit  facilities that were used by the
Company's  North  American  operations.  At December  28, 1996, a total of $43.0
million was outstanding under the credit facility.

The Revolving Credit,  which expires in December 1999, provides the Company with
several  interest  rate  options,  including  U.S.  prime,  LIBOR plus a margin,
Canadian prime plus the applicable  LIBOR margin less 0.50%,  Canadian  banker's
acceptance plus the LIBOR margin plus 0.125%, and short-term fixed rates offered
by the agent bank in the loan  syndication.  The LIBOR margin is currently 1.25%
per annum,  but it can range between 0.75% and 1.50%  depending on the Company's
interest coverage ratio.  Under the Revolving Credit, the Company is required to
pay a quarterly  commitment  fee on the unused portion of the facility at a rate
that ranges from 0.15% to 0.30% per annum.  At December  28, 1996 the  quarterly
commitment fee was 0.25% per annum.

The Revolving Credit contains certain financial covenants,  the most restrictive
of which are a minimum interest  coverage ratio, a maximum funded debt ratio and
a minimum  consolidated  tangible net worth amount.  It also contains  covenants
that  restrict  the  amount of cash  dividends  as well as the  amount  that the
Company can repurchase of its subordinated debt and common stock.

In  August  1996,  the  Company  amended  the  Revolving  Credit to grant to the
syndicated  bank group a  security  interest  in U.S.  accounts  receivable  and
inventories.  The security  interest is subject to automatic release by the bank
group upon the achievement of certain  financial ratios after September 1, 1997.
The  amendment,  among other things,  waived a default in the interest  coverage
covenant as of June 29, 1996.

Capital  expenditures  were $4.5 million for the first half of fiscal 1997.  The
Company expects to spend  approximately $6.0 million on capital  expenditures in
fiscal year 1997, primarily for computer systems and new product tooling.

A principal business strategy of the Company has been to pursue  acquisitions of
businesses,  products or technologies that will complement its current business.
The Company has identified the bicycle and sporting goods industries as possible
areas of focus.  Such  acquisitions  may be funded  with  available  cash,  debt
financing,  issuance of common stock or a combination  thereof.  With respect to
acquisitions  prior to fiscal 1997, the Company has earnout  payments that could
aggregate $2.4 million. Of this amount, $500,000 is payable in February 1997 and
the remainder is subject to future  financial  results.  In November  1996,  the
Company  acquired a  distributor  in Sydney,  Australia  to directly  market its
products.

The Company  believes its available cash flows from operations and the Revolving
Credit should be adequate to satisfy its working capital  requirements in fiscal
1997.  The Company does not anticipate  paying  dividends on its Common Stock in
the foreseeable future.
                                       11
<PAGE>
Certain matters  contained  herein are  forward-looking  statements that involve
risks and  uncertainties  that could cause actual  results to differ  materially
from those in the forward-looking statements. These include, but are not limited
to: seasonality,  adverse outcome from pending litigation,  competitive actions,
loss of  significant  customers,  timing of major  customer  shipments,  adverse
weather  conditions,  retail  environment,  pending  accounting  pronouncements,
economic conditions and currency fluctuations.


RESULTS OF OPERATIONS

         Net Sales.  Net sales increased by 1% to $56.6 million during the three
months ended  December 28, 1996 as compared to $56.2  million in the same period
of 1996.  Bicycle helmets  increased 14% over prior year due to the inclusion of
Giro sales ($3.9 million).  In addition,  accessories  sales increased 5% over a
year ago.  These  increases were offset by a decrease in bicycle sales of 17% or
$2.9 million due to sluggish  industry sales. On a year-to-date  basis net sales
increased 4% to $118.7  million from $113.9  million in the previous  year.  The
year-to-date  increase  can be  attributed  to Giro sales,  offset by lower U.S.
sales caused by a weak U.S. retail environment.

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

                                   Six Months Ended          Three Months Ended
                                   ----------------          ------------------

                                 Dec. 28,     Dec. 30,    Dec. 28,      Dec. 30,
                                  1996         1995        1996          1995
                                  ----         ----        ----          ----
Product Line Sales Mix:
   Bicycle accessories             48%          48%         42%           40%
   Bicycle helmets                 30%          28%         32%           30%
   Bicycles                        20%          23%         24%           29%
   Auto Racing helmets              2%           1%          2%            1%



Management  remains  cautious  about  second  half  sales due to the soft  sales
environment experienced in the U.S. during the second quarter of fiscal 1997.

         Gross Margin. Gross margins were 28% of net sales in the second quarter
and in the first half of fiscal  1997,  in  comparison  to 28% in the prior year
excluding the impact of the inventory  write-up.  Helmet margins improved during
the quarter due to the  addition of Giro but were offset by a decline in bicycle
margins due to increased end of season close-out sales.

During the second  quarter and the first half of fiscal  1996,  $7.1 million and
$13.1 million,  respectively,  were charged to cost of sales for the write-up of
inventory related to the merger with AMRE and the acquisition of SportRack.

         Selling,    General   and   Administrative.    Selling,   general   and
administrative  costs were 26% of net sales in the second quarter of fiscal 1997
compared to 28% in fiscal 1996. Actual selling, general and administrative costs
decreased  7%  to  $14.6   million  for  the  quarter.   Selling,   general  and
administrative  costs declined by $2.6 million or 16%, when excluding Giro which
was  acquired in January  1996.  On a year to date basis,  selling,  general and
administrative  costs decreased 1% to $29.9 million.  When excluding Giro, these
costs  declined  by $3.3  million  or 11%.  Year to date  selling,  general  and
administrative  costs represented 25% of sales compared to 27% in the first half
of fiscal 1996. These reductions result from the Company's recent  restructuring
activities and management's  continuing  efforts to reduce the Company's overall
selling, general and administrative cost structure.
                                       12
<PAGE>
         Amortization  of  intangibles.  Amortization of goodwill and intangible
assets increased to $867,000 in the second quarter and $1.7 million year-to-date
during fiscal 1997  compared to $594,000 in the second  quarter and $1.1 million
year-to-date  for fiscal 1996. The increase is attributed to the  acquisition of
Giro in January 1996.

         Restructuring  charges.  During  fiscal  1996,  the  Company  commenced
significant  organizational  and office  consolidations  including  closing four
offices. Most U.S. sales, marketing and research and development operations were
consolidated in San Jose,  California and all corporate functions in Scottsdale,
Arizona. Substantially all of the Canadian operations were consolidated into one
facility in Granby,  Quebec.  Restructuring charges were $108,000 for the second
quarter and $1.5 million on a year-to-date basis. These costs relate to facility
closing costs,  severance benefits and relocation expenses.

         Net investment income and interest expense.  For the fiscal 1997 second
quarter, net investment income decreased to $500,000 in fiscal 1997, compared to
$930,000  in  fiscal  1996.  This  decline  is due to lower  levels  of cash and
marketable  securities.  Net investment income increased to $2.3 million for the
first six months in fiscal 1997,  compared to $2.0  million in fiscal 1996.  The
increase is due to settlement of an arbitration  case related to the handling of
certain marketable  securities by an outside investment advisor during the first
quarter. The settlement proceeds, net of related expenses and expected losses to
sell certain securities, of $1.3 million, are included in net investment income.
Interest expense  decreased to $1.7 million in the second quarter of fiscal 1997
from $2.0 million in the second quarter of fiscal 1996. On a year to date basis,
interest expense decreased to $3.5 million for fiscal 1997 from $4.3 million for
fiscal 1996. The decreases are due to lower debt balances  outstanding and lower
interest rates for the first six months of fiscal 1997 compared to prior year.

         Income  taxes.  The  effective tax rate was 44% for the quarter and the
six month period of fiscal 1997.  The effective rate was 47% for the quarter and
the six month period of fiscal  1996,  excluding  restructuring  charges and the
impact of the inventory write-up.  The effective rate was 20% if such costs were
included for both periods in fiscal 1996.

         Net income and weighted average shares. Results from operations for the
fiscal 1997 second  quarter was a loss of $475,000 or $0.03 cents on a per share
basis compared to a loss of $7.7 million or $0.56 cents per share for the fiscal
1996 second  quarter.  Second quarter  results  included  pre-tax  restructuring
charges of $108,000 and  $670,000 in fiscal 1997 and fiscal 1996,  respectively.
The results of the second  quarter of fiscal 1996 also  included a $7.2  million
charge for the inventory  write-up  arising from the acquisition of SportRack in
May 1995 and the merger with AMRE,  Inc. in July 1995.  For the six month period
ending  December 28, 1996,  results from  operations  were a loss of $472,000 or
$0.03  cents per share  compared  to a loss of $13.1  million or $0.94 cents per
share for the same period of fiscal  1996.  The fiscal 1996  results  included a
$13.1 million charge for the inventory  write-up arising from the acquisition of
SportRack in May 1995 and the merger with AMRE, Inc. in July 1995.

Weighted  average  shares  outstanding  for the fiscal three month periods ended
December  28,  1996 and  December  30,  1995  were  13.8  million.  Year-to-date
outstanding  shares for fiscal 1997 were 13.8  million  shares  compared to 13.9
million for the same period of fiscal 1996.
                                       13
<PAGE>
                                BELL SPORTS CORP.
                                     PART II


<TABLE>
<S>                        <C>
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
                           (a)      The 1996 Annual Meeting of Stockholders of Bell Sports Corp. was held
                                    on November 21, 1996
                           (b)      Not required
                           (c)      The following matters were voted upon and approved at the meeting:
                                    (i)  The re-election of Class II Directors to serve until the 1999
                                         Annual Meeting; nominees were Frederick W. Winter, Kenneth K.
                                         Harkness and Harry H. Manko
                                    (ii) The re-election of Arnold L. Chavkin, Class III Director, to serve until
                                         the 1997 Annual Meeting
                                    (iii)The amendment to the Bell Sports Corp. 1993 Outside Directors
                                         Stock Option Plan to provide for the payment of retainer fees in
                                         stock options in lieu of cash and to increase the number of shares
                                         issuable under the plan
                                    (iv) The appointment of Price Waterhouse as the independent public
                                         accountants for the Company for its fiscal year ending June 28, 1997

                           Summary of proxies voted:
                                                                                                                   Broker
                                   Proposal                           For            Against        Withheld      Non-Votes
                                   --------                          ----------      --------       --------      ---------
                             (i)   Winter                            10,300,754           ---        288,293          ---
                             (i)   Harkness                          10,300,038           ---        289,009          ---
                             (i)   Manko                             10,300,047           ---        289,000          ---
                             (ii)  Chavkin                           10,298,358           ---        290,688          ---
                             (iii) Stock Option Plan                  9,566,490       486,005         87,536       449,016
                             (iv)  Accountants                       10,472,529        86,628         29,889          ---


                           Total shares voted                  10,589,047
                           Total shares unvoted                 3,111,913

                           (d)      None

Item 5                     Other Information
                           None

Item 6                     Exhibits and Reports on Form 8-K

                           (a)      None
</TABLE>
                                       14
<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 10, 1997
    ------------------------

                             BELL SPORTS CORP.




  /s/ Howard A. Kosick      Executive Vice President and Chief Financial Officer
----------------------      ----------------------------------------------------
Howard A. Kosick            (Principal financial officer)


  /s/ Linda K. Bounds       Vice President and Corporate Controller
---------------------       ---------------------------------------
Linda K. Bounds             (Principal accounting officer)
                                       15
<PAGE>
                                BELL SPORTS CORP.
                                INDEX TO EXHIBITS


Exhibit
Number            Description                                            Page
--------------------------------------------------------------------------------
3                 Bylaws of the Registrant                              Page 17 

10.1              Restated and Amended Bell Sports Corp. 1993 Outside
                  Directors Stock Option Plan                           Page 42

10.2              Form of Restricted Stock Award Agreement dated as of
                  August 27, 1996 between Registrant and certain of
                  its executive officers                                Page 47

11                Statement re: computation of per share earnings       Page 52

27                Financial Data Schedule                               Page 53
                                       16