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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For Quarter Ended: May 31, 2001

Commission File No.: 0-16442


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FIRST TEAM SPORTS, INC.(Exact name of Registrant as specified in its charter)

Minnesota(State or other jurisdiction
of incorporation or organization)

41-1545748(I.R.S. Employer Identification No.)1201 Lund Boulevard
Anoka, Minnesota 55303(Address of principal executive offices)
Registrant's telephone number, including area code: (763) 576-3500


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

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Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 5,917,231 shares of Common Stock, $.01 par value per
share, outstanding as of July 10, 2001.

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PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

FIRST TEAM SPORTS, INC.  CONSOLIDATED BALANCE SHEETS  May 31, 2001 and February 28, 2001

|                        |                                                                                                                     | May 31,
2001                                                                                              |            | February 28,
2001
|----------------------- | ------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ---------- | -----------------
|
|ASSETS                  |                                                                                                                     |                                                                                                           |           
|CURRENT ASSETS          |                                                                                                                     |                                                                                                           |            |                  
|                        | Cash and cash equivalents                                                                                           |                                                                                                           | $          | 885,058          
|                        | Receivables:                                                                                                        |                                                                                                           |            |                  
|                        |                                                                                                                     | Trade, less allowance for doubtful accounts of $803,000 at May 31, 2001 and $948,000 at February 28, 2001 |            |                  
|                        | Inventories                                                                                                         |                                                                                                           |            | 13,623,164       
|                        | Prepaid expenses                                                                                                    |                                                                                                           |            | 977,847          
|                        | Deferred income taxes                                                                                               |                                                                                                           |            | 1,277,000        
|                        |                                                                                                                     |                                                                                                           |            |                  
|                        |                                                                                                                     | Total current assets                                                                                      |            |                  
|PROPERTY AND EQUIPMENT, |                                                                                                                     |                                                                                                           |            |                  
|                        | Land                                                                                                                |                                                                                                           |            | 600,000          
|                        | Building                                                                                                            |                                                                                                           |            | 4,997,840        
|                        | Production equipment                                                                                                |                                                                                                           |            | 2,133,167        
|                        | Office furniture and equipment                                                                                      |                                                                                                           |            | 2,034,276        
|                        | Warehouse equipment                                                                                                 |                                                                                                           |            | 982,740          
|                        | Vehicles                                                                                                            |                                                                                                           |            | 89,942           
|                        |                                                                                                                     |                                                                                                           |            |                  
|                        |                                                                                                                     |                                                                                                           | 10,837,965 |                  
|                        | Less accumulated depreciation                                                                                       |                                                                                                           |            | 4,852,849        
|                        |                                                                                                                     |                                                                                                           |            |                  
|                        |                                                                                                                     |                                                                                                           | 5,985,116  |                  
|DEFERRED INCOME TAXES   |                                                                                                                     |                                                                                                           | 1,821,000  |                  
|OTHER ASSETS            |                                                                                                                     |                                                                                                           |            |                  
|                        | License agreements, less accumulated amortization of $4,450,000 at May 31, 2001 and $4,385,000 at February 28, 2001 |                                                                                                           |            | 915,994          
|                        | Goodwill, less accummulated amortization of $611,000 at May 31, 2001 and $578,000 at February 28, 2001              |                                                                                                           |            | 810,378          
|                        | Other                                                                                                               |                                                                                                           |            | 54,390           
|                        |                                                                                                                     |                                                                                                           |            |                  
|                        |                                                                                                                     |                                                                                                           | 1,780,762  |                  
|                        |                                                                                                                     |                                                                                                           |            |                  
|                        |                                                                                                                     | $                                                                                                         | 36,757,979 |                  
|                        |                                                                                                                     |                                                                                                           |            |                  

See
accompanying notes.

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|                                     |                                                                                                                                                                   | May 31,
2001 |            | February 28,
2001 |  
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | ---------- | ----------------- | -
|
|LIABILITIES AND SHAREHOLDERS' EQUITY |                                                                                                                                                                   |              |            |                  
|CURRENT LIABILITIES                  |                                                                                                                                                                   |              |            |                   |  
|                                     | Notes payable to bank                                                                                                                                             |              | $          | 4,152,459         |  
|                                     | Current maturities of long-term debt                                                                                                                              |              |            | 523,949           |  
|                                     | Accounts payable, trade                                                                                                                                           |              |            | 3,286,278         |  
|                                     | Accrued expenses                                                                                                                                                  |              |            | 1,329,740         |  
|                                     |                                                                                                                                                                   |              |            |                   |  
|                                     | Total current liabilities                                                                                                                                         |              |            | 9,292,426         |  
|LONG-TERM DEBT,                      |                                                                                                                                                                   |              |            |                   |  
|                                     | less current maturities                                                                                                                                           |              |            | 5,041,064         |  
|Deferred income taxes                |                                                                                                                                                                   |              | 60,000     |                   |  
|DEFERRED REVENUE                     |                                                                                                                                                                   |              | 503,800    |                   |  
|SHAREHOLDERS' EQUITY                 |                                                                                                                                                                   |              |            |                   |  
|                                     | Common Stock, par value $.01 per share; authorized 10,000,000 shares; issued and outstanding 5,917,231 shares at May 31, 2001, and 5,912,342 at February 28, 2001 |              |            | 59,173            |  
|                                     | Additional paid-in capital                                                                                                                                        |              |            | 10,015,882        |  
|                                     | Retained earnings                                                                                                                                                 |              |            | 12,189,168        |  
|                                     | Accumulated other comprehensive loss                                                                                                                              |              |            | (403,534          | )
|                                     |                                                                                                                                                                   |              |            |                   |  
|                                     |                                                                                                                                                                   |              | 21,860,689 |                   |  
|                                     |                                                                                                                                                                   |              |            |                   |  
|                                     |                                                                                                                                                                   | $            | 36,757,979 |                   | $
|                                     |                                                                                                                                                                   |              |            |                   |  

See
accompanying notes.

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FIRST TEAM SPORTS, INC.  CONSOLIDATED STATEMENTS OF OPERATIONS    (Unaudited)

|                                                           |                                                   | Three months ended
May 31, |          
|---------------------------------------------------------- | ------------------------------------------------- | -------------------------- | ---------
|
|Net sales                                                  |                                                   | $                          | 8,122,750
|Cost of goods sold                                         |                                                   |                            | 5,857,277
|                                                           |                                                   |                            |          
|                                                           | Gross profit                                      |                            |          
|Operating expenses:                                        |                                                   |                            |          
|                                                           | Selling                                           |                            |          
|                                                           | General and administrative                        |                            |          
|                                                           |                                                   |                            |          
|                                                           |                                                   |                            | 2,893,578
|                                                           |                                                   |                            |          
|                                                           | Operating (loss)/income                           |                            |          
|                                                           | Interest expense                                  |                            |          
|                                                           |                                                   |                            |          
|                                                           | (Loss)/Income before income tax expense/(benefit) |                            |          
|Income tax expense/(benefit)                               |                                                   |                            | 14,141   
|                                                           |                                                   |                            |          
|                                                           | Net (loss)/income for the period                  |                            | $        
|                                                           |                                                   |                            |          
|Net (loss)/income per share:                               |                                                   |                            |          
|                                                           | Basic                                             |                            | $        
|                                                           | Diluted                                           |                            | $        
|Shares used in computation of net (loss)/income per share: |                                                   |                            |          
|                                                           | Basic                                             |                            |          
|                                                           | Diluted                                           |                            |          

See
accompanying notes

---

FIRST TEAM SPORTS, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS  For Three Months Ended May 31, 2001 and 2000    (Unaudited)

|                                     |                                                                                                             | May 31,
2001                                        |   | May 31,
2000 |           
|------------------------------------ | ----------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | - | ------------ | ----------
|CASH FLOWS FROM OPERATING ACTIVITIES |                                                                                                             |                                                     |   |              |           
|                                     | Net (loss) income                                                                                           |                                                     | $ | (883,363     | )         
|                                     | Adjustments required to reconcile net (loss) income to net cash (used in) provided by operating activities: |                                                     |   |              |           
|                                     |                                                                                                             | Depreciation                                        |   |              | 196,953   
|                                     |                                                                                                             | Amortization                                        |   |              | 109,269   
|                                     |                                                                                                             | Deferred income taxes                               |   |              | 46,500    
|                                     |                                                                                                             | Deferred revenue                                    |   |              | (3,840    
|                                     |                                                                                                             | Change in assets and liabilities:                   |   |              |           
|                                     |                                                                                                             | Receivables                                         |   |              | 1,335,703 
|                                     |                                                                                                             | Inventories                                         |   |              | (569,749  
|                                     |                                                                                                             | Prepaid expenses                                    |   |              | (29,892   
|                                     |                                                                                                             | Accounts payable                                    |   |              | (2,060,958
|                                     |                                                                                                             | Accrued expenses                                    |   |              | (399,897  
|                                     |                                                                                                             |                                                     |   |              |           
|                                     |                                                                                                             | Net cash (used in) provided by operating activities |   |              | (2,259,274
|CASH FLOWS FROM INVESTING ACTIVITIES |                                                                                                             |                                                     |   |              |           
|                                     |                                                                                                             | Purchase of property and equipment                  |   |              | (24,716   
|                                     |                                                                                                             |                                                     |   |              |           
|                                     |                                                                                                             | Net cash used in investing activities               |   |              | (24,716   
|CASH FLOWS FROM FINANCING ACTIVITIES |                                                                                                             |                                                     |   |              |           
|                                     |                                                                                                             | Net proceeds on short-term borrowings               |   |              | 3,012,364 
|                                     |                                                                                                             | Principal payments on long-term borrowings          |   |              | (128,683  
|                                     |                                                                                                             | Net proceeds from exercise of stock options         |   |              | 4,449     
|                                     |                                                                                                             |                                                     |   |              |           
|                                     |                                                                                                             | Net cash provided by financing activities           |   |              | 2,888,130 
|                                     |                                                                                                             |                                                     |   |              |           
|                                     |                                                                                                             | Increase in cash and cash equvalents                |   |              | 604,140   
|                                     |                                                                                                             | Effect of foreign currency translation              |   |              | (37,060   
|Cash and cash equivalents:           |                                                                                                             |                                                     |   |              |           
|                                     | Beginning                                                                                                   |                                                     |   | 317,978      |           
|                                     |                                                                                                             |                                                     |   |              |           
|                                     | Ending                                                                                                      |                                                     | $ | 885,058      |           
|                                     |                                                                                                             |                                                     |   |              |           

See
accompanying notes

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FIRST TEAM SPORTS, INC.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    (Unaudited)

NOTE 1.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation have been included. The operating results for the period ended May 31, 2001 are not necessarily indicative of the operating results to be expected
for the full fiscal year.

For
further information, refer to the financial statements and footnotes thereto included in the Company's annual report or Form 10-K for the year ended
February 28, 2001.

NOTE 2.

During the quarters ended May 31, 2001 and 2000, total comprehensive (loss)/income amounted to ($1,079,639) and $729,454 respectively.

NOTE 3.

|                            |  | Basic EPS |       | Diluted EPS
|--------------------------- |  | --------- | ----- | -----------
|
|
|Three Months Ended May 31   |  |           |       |            
|Net (loss)/Income           |  | $         | (883  | )          
|                            |  |           |       |            
|Weighted average common     |  |           |       |            
|shares outstanding          |  |           | 5,912 |            
|Stock options               |  |           |      |            
|                            |  |           |       |            
|Total common equivalent     |  |           |       |            
|shares outstanding          |  |           | 5,912 |            
|                            |  |           |       |            
|Net (loss)/Income per share |  | $         | (.15  | )          

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

First Team Sports, Inc. (the "Company") is a leading manufacturer, designer and marketer of brand name sporting goods. The Company's product groups
consist of in-line skates, in-line accessories and parts (primarily protective wear and replacement wheels and bearings), ice hockey sticks and ice hockey protective wear and
accessories. Within the product groups, the Company maintains UltraWheels® and Skate Attack® in-line product lines and a Hespeler® ice hockey line. The
UltraWheels line consists of higher quality and higher priced products that are targeted for specialty and sporting goods chain store customers. The Skate Attack line consists of lower priced products
for the mass merchant customers. The Hespeler ice hockey line consists of high quality products that are targeted primarily for the specialty and sporting goods chain stores.

RESULTS OF OPERATIONS

Net Sales.Net sales were $8.1 million in the first quarter of fiscal 2002, a decrease of 49% compared to net
sales of $15.9 million in the first quarter of fiscal 2001. Decreases in unit sales of in-line skates, ice hockey sticks and protective wear were the principal factors in the
Company's net sales decrease in the first quarter of fiscal 2002.

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A breakdown and analysis of the Company's main product lines is as follows:

|                                  |  | First Quarter |    
|--------------------------------- |  | ------------- | ---
|
|
|
|In-line Skates                    |  | $             | 6.2
|In-line Accessories and Parts     |  |               | 1.0
|Ice Hockey Sticks                 |  |               | 0.3
|Ice Hockey Protective and Access. |  |               | 0.6
|                                  |  |               |    
|Total Net Sales                   |  | $             | 8.1
|                                  |  |               |    

The
Company currently distributes products to numerous countries worldwide. A geographic breakdown of the Company's net sales for the first quarter is as follows:

|                    |  | Fiscal 2002 |     | Fiscal 2001 |       |   |  
|------------------- |  | ----------- | --- | ----------- | ----- | - | -
|
|
|Domestic            |  | $           | 5.2 |             | 64.2  | % | $
|Canada              |  | $           | 1.9 |             | 23.5  | % |  
|Europe              |  | $           | 0.7 |             | 8.6   | % |  
|Other International |  | $           | 0.3 |             | 3.7   | % |  
|                    |  |             |     |             |       |   |  
|Total Net Sales     |  | $           | 8.1 |             | 100.0 | % | $
|                    |  |             |     |             |       |   |  

Several
factors contributed to the Company's sales performance in the first quarter of fiscal 2002. The decrease in the domestic and Canadian sales was the result of a
slow-down in consumer spending throughout North America, a large carryover of retail inventory after the Holiday season and poor Spring weather throughout North America and Europe, which
resulted in reductions and/or cancellation of Spring orders by some major customers.

Gross Margin.As a percentage of net sales, the Company's gross margin was 28% in the first quarter of fiscal 2002 and
32% in fiscal 2001. The decrease in gross margin as a percentage of net sales in the first quarter of fiscal 2002 was primarily due to the national and international markets that continue to be very
competitive and are under extreme price competition.

The
Company's UltraWheels brand accounted for 85% of total net sales in the first quarter of fiscal 2002 compared to 80% in the first quarter of fiscal 2001. The Company's Skate
Attack brand accounted for 4% of total sales in the first quarter of fiscal 2002 compared to 6% in the first quarter of fiscal 2001. The Hespeler brand accounted for 11% of total net sales in the
first quarter of fiscal 2002 compared to 14% in the first quarter of fiscal 2001.

Operating Expenses.Selling expenses were $1.0 million (or 13% of total net sales) in the first quarter of
fiscal 2002 compared to $1.4 million (or 9%) in the first quarter of fiscal 2001. The decrease in the absolute dollar amount of selling expenses in fiscal 2001 is primarily the result of a
decrease in commissions associated with the decreased sales volume.

General
and administrative expenses were $1.8 million (or 23% of total net sales) in the first quarter of fiscal 2002 compared to $2.0 million (or 13%) in the first
quarter of fiscal 2001. The decrease in the absolute dollar amount of general and administrative expenses was primarily related to decreased personnel costs associated with revenue reductions.

Other Income and Expense.Interest expense was $269,000 in the first quarter of fiscal 2002 compared to $308,000 in the
first quarter of fiscal 2001. The decrease in interest expense for fiscal 2002 was primarily due to decreased usage of the Company's line of credit facility and a decrease in the bank's prime rate.
The decreased rates affected both the Company's revolving line of credit facility and its term loan.

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Provision for Income Taxes.The Company's effective tax rate was 1.6% in the first quarter of fiscal 2002 compared to
34.5% in the first quarter of fiscal 2001. The decrease in fiscal 2002 is primarily due to the valuation allowance against deferred tax assets and the effect of state and foreign tax rates.

Net (Loss)/Income.The Company had a net loss of ($883,000), or ($.15) per share, in the first quarter of fiscal 2002
compared to net income of $893,000 or $.15 per share, in fiscal 2001.

LIQUIDITY AND CAPITAL RESOURCES

In the first quarter of fiscal 2002, the Company's operations used $2.3 million of cash compared to providing $266,000 of cash in the first quarter of
fiscal 2001. The cash used by operations in the current year was primarily due to a decrease in payables.

Net
cash used in investing activities was $25,000 in the first quarter of fiscal 2002 compared to $214,000 in the first quarter of fiscal 2001. The use of cash for investing
activities was attributable to equipment purchases.

Net
cash provided by financing activities was $2.9 million in the first quarter of fiscal 2002 compared to $1.1 million in the first quarter of fiscal 2001. The net cash
provided by bank financing activities in both fiscal 2002 and 2001 was primarily for funding the normal day to day operations of the Company.

The
Company's debt to worth ratio was .7 to 1 as of May 31, 2001, .6 to 1 as of February 28, 2001 and .8 to 1 as of May 31, 2000. The Company's
long-term debt, which consists primarily of a term note secured by a mortgage on the Company's headquarters and warehouse building and obligations under endorsement license agreements,
less current maturities of $500,000, was $5.0 million as of May 31, 2001.

The
Company's primary financing facility is a $10 million revolving credit line, which expires February 28, 2004, bears interest at the bank's prime rate and is subject
to a borrowing base that is calculated monthly and updated periodically during each month. The borrowing base is based on a percentage of eligible receivables and inventories. As of May 31,
2001, the borrowing base limitation was $10 million, of which $4.2 million was outstanding.

In
connection with this revolving credit facility, the Company has agreed, among other things, to maintain certain minimum financial ratio and income levels. The Company is in
compliance with all covenants.

The
Company believes its current cash position, funds available under existing bank arrangements, and cash generated from operations will be sufficient to finance the Company's
operating requirements through fiscal 2002.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk.The Company's sales and results of operations are subject to foreign currency fluctuations. The Company's
foreign operations are in countries with fairly stable currencies; therefore, the effect of foreign currencies has not been significant. The Company attempts to limit its exposure to translation gains
and losses by maintaining and controlling its foreign cash flows when possible, thus reducing such exposure.

Interest Rate Risk.The Company's interest rate risk exposure results from the floating prime rate on the Company's
revolving credit line and term loan. The impact of an increase in interest rates by 100 basis points (1%) would not have a material effect on the Company's financial statement.

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PART II  OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K



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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.

|                      |  | FIRST TEAM SPORTS, INC.
|--------------------- |  | -----------------------
|                      |  | By:                    
|                      |  | and By:                
|Dated:  July 13, 2001 |  |                        

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

EXHIBIT INDEX TO FORM 10-Q

|For Quarter Ended:
May 31, 2001 |  | Commission File No.:
0-16422
|------------------------------- |  | ----------------------------

FIRST TEAM SPORTS, INC.

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|Exhibit Number |  | Description                                                                                                                                                                                                                    
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Restated Articles of Incorporationincorporated by reference to Exhibit 3.1 to the Company's Form 10-K for the year ended February 28, 1997                                                                                    
|3.2            |  | Bylawsincorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-18 Reg. No. 33-16345C                                                                                                        
|4.1            |  | Specimen of Common Stock Certificateincorporated by reference to 4.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended February 28, 1991                                                               
|4.2            |  | Certificate of Designations of Series A Preferred Stock (included in Restated Articles of Incorporationsee Exhibit 3.1)                                                                                                       
|4.3            |  | Rights Agreement dated as of March 15, 1996 between the Company and Norwest Bank Minnesota, N.A. as Rights Agentincorporated by reference to Exhibit 2.1 to the Company's Registration Statement on Form 8-A, Reg. No. 0-16422
|4.4            |  | Form of Right Certificateincorporated by reference to Exhibit 2.2 to the Company's Registration Statement on Form 8-A, Reg. No. 0-16422                                                                                       
|4.5            |  | Summary of Rights to Purchase Share of Series A Preferred Stock-incorporated by reference to Exhibit 2.3 to the Company's Registration Statement of Form 8-A, Reg. No. 0-16422                                                 

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