<PAGE>

==============================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-K

  (MARK ONE)
     [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 25, 1999

                                       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 0-22359
                                 TRACK 'N TRAIL
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

           DELAWARE                                  91-1778085
           STATE OR OTHER JURISDICTION OF           (I.R.S. EMPLOYER
           INCORPORATION OR ORGANIZATION)            IDENTIFICATION NO.)

           4961-A WINDPLAY DRIVE,
           EL DORADO HILLS, CALIFORNIA               95762
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)  (ZIPCODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (916) 933-4525
        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                          COMMON STOCK, $.01 PAR VALUE
                                (TITLE OF CLASS)

         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
                                                                   ---     ---
         Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K [ ].

         The aggregate market value of Common Stock held by non-affiliates of
the registrant on March 20, 2000 was $3.4 million.

         On March 20, 2000 the registrant had 7,156,759 shares of Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Part III incorporates information by reference from the definitive
Proxy Statement for the 2000 Annual Meeting of Stockholders, to be filed with
the Commission no later than 120 days after the end of the registrant's
fiscal year covered by this Form 10-K.

==============================================================================
<PAGE>

                                     PART I

ITEM 1.   BUSINESS

          Track 'n Trail, a Delaware corporation (together with its
subsidiaries, unless the context otherwise requires, the "Company"), is one
of the largest full-service specialty retailers in the United States focusing
on a broad range of high-quality branded casual, outdoor and adventure
footwear. The Company has increased its number of stores and net sales each
year since inception. Pursuant to the reorganization (the "Reorganization")
effected in October 1997, the Company acquired the businesses conducted by
its subsidiaries, Track 'n Trail, a California corporation ("Track 'n
Trail-California"), and Overland Management Corporation ("Overland"). The
Company obtained 33 Overland Trading stores by acquiring control of Overland
on October 25, 1996. On August 26, 1998, the Company acquired Nevin's Eagles
Nest, Inc. ("Eagles Nest"), a retailer of premium branded outdoor apparel.
The Company operates in a single business segment.

          In December 1999, the Company adopted a plan to restructure
operations and divest itself of its Eagles Nest locations and also close 35
marginal or unprofitable Track 'n Trail and Overland stores. It is estimated
that the restructuring will be completed during the first 120 days of fiscal
2000.

          As of December 25, 1999, the Company operated 199 stores in 35
states under the Track 'n Trail, Overland Trading and Eagles Nest names. All
but three of the Company's stores are located in regional or super-regional
shopping malls, located throughout the United States. Each Track 'n Trail and
Overland store offers a wide range of rugged walking and fashion casual
shoes, sandals and boots, featuring brands such as Timberland, Dr. Martens,
Birkenstock, Vans, Teva, Etnies, Clarks, Ecco and Rockport. In addition to
offering many of the same footwear brands as Track 'n Trail and Overland,
each Eagles Nest store specialized in sport and outdoor apparel lines.

          The Company targets middle to upper income consumers, with the
Track 'n Trail stores focusing on consumers in the 15- to 40-year-old age
group and the Overland Trading stores focusing on the 25- to 55-year-old age
group. The Company markets to these two different customer segments through
distinct merchandise assortments and store designs. The Track 'n Trail stores
offer a merchandise selection that emphasizes fashionable,
performance-oriented footwear and typically feature an all-glass front, often
accented with rock fixtures, and earth-tone interiors reminiscent of an
outdoor setting. The Company's Overland Trading stores are merchandised and
designed to appeal to a slightly older and more conservative consumer, with a
focus on traditional and comfort-oriented styles displayed in a contemporary,
natural wood setting. Track 'n Trail stores average approximately 2,026
square feet in size, the Overland Trading stores average approximately 1,502
square feet and the Eagles Nest stores average approximately 5,480 square
feet in size. As of December 25, 1999, the Company operated 144 Track 'n
Trail stores in 34 states, 48 Overland Trading stores in 13 states and seven
Eagles Nest stores in four states.

OPERATING STRATEGIES

          The Company's goal is to become the premier destination specialty
retailer of better casual, outdoor and adventure footwear. To accomplish its
goal, the Company is pursuing the following operational strategies:

          BRAND NAME MERCHANDISE. Management believes that brand name identity
          is of paramount importance to its target customer in making footwear
          purchasing decisions. The Company focuses on carrying authentic,
          well-established brand names for each product category. For example,
          the Company offers the Timberland brand for quality hiking, work,
          performance and casual boots and shoes. For younger buyers of
          "alternative" footwear, the Company offers Dr. Martens, Vans, and
          Etnies shoes. The Company features the Ecco and Rockport brands in the
          walking shoe and rugged walking category and the Birkenstock brand in
          walking sandals. In the category of performance, water and active
          sandals, the Company offers the Teva brand. Management believes that
          each of the foregoing brands is recognized as one of the originals in
          the primary category it represents.


                                       1
<PAGE>

          CUSTOMER SERVICE AND CONVENIENCE. The Company is committed to
          achieving customer satisfaction and to building a loyal customer
          base by providing a high level of knowledgeable, attentive and
          personalized customer service. The Company believes that educating
          consumers about the features and benefits of its product offerings
          is a critical component of its success, and management considers
          its sales associates' knowledge of the Company's customers and
          products to be essential to its marketing approach and customer
          satisfaction. The Company's extensive employee training and
          development programs are designed to provide its field personnel
          with the knowledge and skills needed to understand and communicate
          the performance characteristics of the Company's merchandise, and
          to better serve its customers' needs.

          CAPITALIZE ON TWO DISTINCT DEMOGRAPHIC GROUPS. Management believes
          that the Company's distinct retail concepts enable it to serve two
          diverse and rapidly growing demographic groups. Track 'n Trail stores
          are designed and merchandised to target 15- to 40-year-olds, while
          Overland Trading stores target 25- to 55-year-olds. The Track 'n Trail
          strategy is to focus on products that reflect an active and
          performance-oriented lifestyle, which the Company believes are
          particularly popular with the fast-growing 15- to 24-year-old age
          group. Overland Trading stores are designed to appeal more to the
          large 25- to 55-year-old age group. Management plans to differentiate
          the two footwear retail concepts to a greater degree in malls in which
          the Company operates both a Track 'n Trail store and an Overland
          Trading store.

          FOCUSED MERCHANDISING STRATEGY. To tailor merchandise mix to
          individual stores' customer profiles, increase inventory efficiency
          and minimize lost sales due to out-of-stock occurrences, the Company
          analyzes detailed sales and inventory data generated by the Company's
          advanced information and distribution systems on a daily basis. The
          Company's systems, which feature automatic replenishment,
          point-of-sale ("POS") data collection and electronic data interchange
          ("EDI"), capture net sales and inventory data daily on a
          store-by-store basis for each stock keeping unit ("SKU").

          RECOGNIZE AND RESPOND TO CHANGING LIFESTYLE TRENDS. The Company
          strives to recognize and quickly respond to lifestyle trends that
          affect customer preferences. Most recently, prevailing lifestyle
          trends that have affected retail footwear sales have included (i) the
          growth in alternative sports such as skateboarding, snowsports,
          in-line skating and mountain biking as well as the footwear trends
          these sports have inspired, (ii) the movement to outdoor activities
          and to nature as evidenced by the resurgence of walking, hiking,
          biking, fly fishing and camping and (iii) the increased acceptance of
          casual dress for both work and social settings. Management believes
          that it has developed strong relationships with the primary suppliers
          of the more than 100 brand names that the Company carries. These
          relationships provide access to market information regarding emerging
          merchandise trends. Management believes that the breadth and strength
          of these relationships, together with the Company's focused
          merchandising strategy, provide the Company with the flexibility
          necessary to permit it to respond accurately and quickly to changing
          customer preferences.

MERCHANDISING

          The Company's footwear merchandising philosophy is to maintain a
core group of basic styles while identifying and stocking emerging brands and
styles. The Company avoids taking significant inventory risk on new items by
carefully testing and monitoring their sales. The Company generally tests and
monitors numerous new styles each year. After evaluation of market
performance and other criteria, a new style may be distributed to a broader
segment of stores or system-wide.

          Merchandising decisions, including merchandise mix, pricing,
promotions and markdowns, are made at the Company's corporate offices. The
Company's product purchasing is coordinated through a centralized
merchandising department under the direction of its Executive Vice
President-Merchandising/Chief Operating Officer. The merchandising department
currently consists of approximately 21 persons, including two merchandising
managers, three buyers for the Track 'n Trail stores and two buyers for the
Overland Trading stores. The Company's Track 'n Trail and Overland Trading
buyers operate independently, allowing them to focus on their distinct
customers' merchandise preferences and lifestyles. These buyers are supported
by stock allocation analysts and assistants, who manage the

                                       2
<PAGE>

Company's computerized merchandise planning system. Management also receives
input from the Company's 14 district managers and two regional managers
regarding local or regional factors relevant to merchandising decisions.

          The principal categories of product offered by the Company's
concepts and selected vendors for each, are summarized below:

MEN'S AND WOMEN'S FUNCTIONAL AND SPORT SPECIFIC MERCHANDISE

          Functional products are designed to perform under adverse
conditions or for a specific activity such as hiking and water sports, field
and duty, skateboarding, snowsports and inclement weather.

<TABLE>
<CAPTION>

SELECTED TRACK 'N TRAIL VENDORS       SELECTED OVERLAND TRADING VENDORS        SELECTED EAGLES NEST VENDORS*
<S>                                 <C>                                    <C>
Timberland                            Timberland                               The North Face
Solomon                               Teva                                     Patagonia
Vasque                                Columbia                                 Columbia
Caterpillar                                                                    Ex Officio
Teva                                                                           Royal Robbins
Vans
Etnies
Adidas
Columbia
</TABLE>

* In December 1999, the company adopted a restructuring plan which
includes liquidation of its Eagles Nest stores

MEN'S AND WOMEN'S CASUAL WEAR

          Casual footwear and sportswear is designed primarily for everyday
wear such as walking shoes and casual tops and bottoms including shorts,
trousers, pants, T-shirts, knit and woven shirts, blouses, dresses and skirts.

<TABLE>
<CAPTION>

SELECTED TRACK 'N TRAIL VENDORS       SELECTED OVERLAND TRADING VENDORS        SELECTED EAGLES NEST VENDORS*
<S>                                <C>                                      <C>
Birkenstock                           Timberland                               Tommy Bahama
Rockport                              Clarks                                   Tsunami
Timberland                            Joseph Seibel                            Royal Robbins
Dr. Martens                           Rockport                                 True Grit
Born                                  Stegmann                                 Woolrich
Simple                                Ecco                                     Gramicci
Havana Joe                            Birkenstock
                                      Dr. Martens
                                      Havana Joe
                                      Born
                                      Sperry
</TABLE>

* In December 1999, the company adopted a restructuring plan which
includes liquidation of its Eagles Nest s ores

The following table sets forth the Company's merchandise assortment by
category as a percentage of net sales for the periods shown:

<TABLE>
<CAPTION>
                                                                                          FISCAL
                                                                        ------------------------------------------
                                                                          1999            1998              1997
                                                                        --------        ---------        ---------


                                       3
<PAGE>
<S>                                                                   <C>              <C>               <C>
Men's and Women's Functional and Sport Specific Footwear.........         28 %              28 %              31 %
Men's and Women's Casual Footwear ...............................         58                60                60
Apparel .........................................................          5                 2                --
Men's, Women's and Children's Slippers...........................          1                 1                 1
Children's Footwear..............................................          1                 1                 1
Shoe Care Products, Hosiery and Accessories......................          7                 8                 7
                                                                          ---               ---               --
                                                                         100%              100%              100%
                                                                         =====             =====             ====
</TABLE>

ACCESSORIES

          The Company also offers accessories, including socks, belts,
backpacks and shoe care products such as sprays and polishes. Some of these
accessories carry the same brand names as the ready-to-wear and footwear sold
by the Company, although most are supplied by different manufacturers.
Accessories accounted for approximately 7.2% of net sales at the Track 'n
Trail and Overland Trading stores in fiscal 1999.

PURCHASING AND SOURCING

          The Company believes that its ability to buy in large quantities
directly from suppliers helps it to plan merchandise flow effectively and to
obtain competitive pricing and trade terms. Although the Company deals with
approximately 100 vendors, a substantial portion of the Company's merchandise
is provided by a limited number of brand name suppliers. The Company's ten
largest suppliers accounted for approximately 66.6% of the Company's net
sales in fiscal 1999. In fiscal 1999, Dr. Martens, Timberland and Birkenstock
accounted for 20.7%, 13.6% and 8.3% of the Company's total net sales,
respectively.

          The Company strives to build and maintain strong and interactive
relationships with its major suppliers. Buyers meet regularly with major
vendors to stay abreast of new product lines, new features and changes in
styling direction. The Company frequently shares information with its vendors
about market research, merchandising trends and the Company's goals. In
addition, the Company has established EDI programs with most of its major
suppliers in order to improve its inventory efficiency. The Company develops
and transmits purchase orders through its EDI links, and receives information
about order status, delivery times and pricing from the suppliers. These
programs thus permit more rapid merchandise replenishment and faster
inventory turns. The Company believes that its relationships with major
suppliers improve its ability to obtain desired styles and give the Company
flexibility to adjust to shifting market demand for different vendors'
products from season to season. In an effort to secure appropriate quantities
of items that are in high demand, the Company advises its major vendors of
its forecasted needs approximately six to 12 months in advance. However, the
Company has no long-term purchase contracts or other contractual assurances
of continued supply or pricing with any of its suppliers. See "Risk Factors."

STORE OPERATIONS

          The Company operated 199 stores as of December 25, 1999, all but
three of which were located in regional or super-regional shopping malls.
Although all stores are integrated into the Company's inventory control,
distribution and management information systems, Track 'n Trail, Overland
Trading and Eagles Nest stores differ in format, merchandise content and
decor because of their different targeted customer bases.

TRACK 'N TRAIL STORE FORMAT

          The Track 'n Trail storefront design typically features an all
glass 20- to 30-foot front, enabling customers to view featured products on
display as well as the extensive product assortment available inside the
store. The edges of the storefront are often accented with rock fixtures that
are a signature element in the Track 'n Trail design theme. Product display
fixtures at several stores are designed to represent rock formations, which
may also be incorporated into customer seating fixtures and waterfall display
pieces. The store interiors feature natural-tone walls, accent trim,


                                       4

<PAGE>

furniture and fixtures. Floor coverings are natural wood or soft earth-tone
carpeting, and often include colorful murals depicting outdoor scenes,
providing an environment that is both aesthetically pleasing and
complementary to the product displays. Each style of footwear is displayed by
category, such as hiking boots or sandals. Merchandise is typically featured
on rock displays or fixtures along the walls of the stores, with product
categories indicated by an overhead sign. The eight Track 'n Trail stores
located in the Mills malls feature a contemporary "industrial" decor, and
utilize industrial equipment throughout as props and fixtures. Track 'n Trail
stores average approximately 2,026 square feet in size, of which 40% to 60%
is devoted to the sales floor.

OVERLAND TRADING STORE FORMAT

          Overland Trading stores generally feature interiors that are well
lighted, open and inviting. Most stores have two display windows in which a
representative collection of merchandise is presented. Store furnishings are
constructed of high-quality light woods that contrast against the rich,
emerald green floor coverings. Management believes that the Overland Trading
stores' more traditional environment conveys the high quality of merchandise
and service sought by the Overland Trading concept's more mature target
consumer. The Overland Trading merchandising approach focuses on the
high-quality brands carried. Each major brand is housed as a "collection" in
a distinct wall section, which is delineated by architectural elements and by
a distinctive, back-lit overhead sign carrying the vendor's logo. For
example, men's Timberland footwear is presented as a collection within a
defined wall section, with a back-lit Timberland sign overhead. Overland
Trading stores have sales floors similar in size to those at Track 'n Trail
stores, but the stores acquired by the Company in October 1996 have smaller
stockrooms. The Company has incorporated larger stockrooms in the Overland
Trading stores opened after the acquisition of Overland in order to minimize
missed sales opportunities due to shortages of high-demand products. Overland
Trading stores average approximately 1,502 square feet in size, of which 40%
to 60% is devoted to the sales floor.

EAGLES NEST STORE FORMAT

          Eagles Nest stores are designed with expansive, all glass
storefronts framed in rich slate and warm natural wood design elements.
Windows feature mannequins showing the most current sportswear and active
wear collections and accessories. Store interiors feature a contemporary
outdoor environment created through wall elements that are used to create
mountain silhouettes depicting the heritage of the company's Rocky Mountain
roots. Vignettes featuring natural wood and slate elements emphasize
sportswear, travel and active wear collections throughout the store's
interior. Impact brand signing is used to call attention to the collections
of premium quality and unique brands carried in the Eagles Nest stores.
Eagles Nest stores average approximately 5,480 square feet in size, of which
75% to 85% is devoted to the sales floor. These stores will be closed in the
first 120 days of fiscal 2000 as part of a restructuring plan adopted in
December 1999.

STORE MANAGEMENT AND COMPENSATION

          The Company's Vice President-Stores, two regional managers and 14
district managers visit each of the Company's stores on a regular basis to
review the implementation of Company policy, monitor operations and review
inventories and merchandise presentation. Each store has a store manager who
is responsible for supervision and overall operations, two to three assistant
managers and approximately four to eight sales associates, most of whom work
part-time.

          The regional, district and store managers receive fixed salaries
and are eligible for incentive bonuses, primarily based on their achievement
of the goals stated in the Company's Management by Objective ("MBO") program.
The MBO program focuses on reviewing, managing and improving two key
objectives: net sales and inventory shrinkage. All field incentive
compensation programs are based upon goals within these two key objectives.
To support the MBO program, the Company has developed an appraisal system to
monitor each store's performance on a monthly and quarterly basis. Each
appraisal focuses on a store's performance in a key compliance area such as
customer service,


                                       5
<PAGE>

visual presentation, store operations or loss prevention, to support
performance in the two key MBO objectives. The Company also monitors many
other store-level variables from its corporate offices, including payroll
costs, refund levels, register variances, telephone bills and similar items.

          The Company intends for store employees to focus a substantial
portion of their efforts on customer service. As a consequence, the Company
has centralized as many administrative functions as possible, including
buying, development of in-store merchandising displays, inventory allocation,
human resources and accounting functions, at its El Dorado Hills, California
corporate offices.

CUSTOMER SERVICE

          The Company is committed to achieving customer satisfaction and to
building a loyal customer base by providing a high level of knowledgeable,
attentive and personalized customer service. The Company believes that
educating consumers about the features and benefits of its product offerings
is a critical component of its success, and management considers its sales
associates' knowledge of the Company's customers and products to be essential
to its marketing approach and customer satisfaction.

          To develop knowledgeable and responsive sales associates, the
Company has devoted significant resources to developing and implementing
employee development and incentive programs. All store employees receive
extensive training on merchandise features, benefits and technology, as well
as customer relations and selling skills. The training program focuses on
"six steps" to achieve sales and customer satisfaction: greeting the
customer; assessing his or her needs; exceeding customer expectations;
overcoming objections; suggestive selling; and closing the sale. In addition
to training from the store manager, each employee attends regional product
information seminars, receives in-store training through vendor presentations
and vendor-supplied videotapes, and is required to complete a formal, written
training program. Store managers are also required to complete a 12-week
training program, during which they are instructed in the technical aspects
of the merchandise, management skills and employee relations. To provide
managers with hands-on training, new store and district managers are
typically required to work alongside individuals in comparable positions for
two to three weeks before they are asked to perform their duties without
direct supervision. Managers also attend a minimum of three management
training meetings per year. Supplemental product information bulletins are
distributed frequently from the Company's corporate offices to educate store
managers and sales associates about new products as they are introduced. The
Company also employs an independent agency to send unidentified "mystery
shoppers" to Company stores, and to report on the service provided to these
shoppers by store personnel. The Company also monitors the level of customer
service on an ongoing basis through various initiatives, such as telephone
surveys.

STORE LOCATIONS

          The Company considers its ability to obtain attractive,
high-traffic store locations to be a critical element of its business and a
key factor in the Company's future growth and profitability. In determining
new store locations, the Company considers regional and local economic
conditions and household income data, mall locations, site locations within
the mall, vacancy rates, sales per square foot, "anchor" tenant stores,
tenant mix, consumer traffic, competition and occupancy, construction and
other costs associated with opening a store. Site selection and lease
negotiation are supervised by the Company's Vice President-Real Estate and
senior management.

        The Company operated 199 stores in 35 states as of December 25,
1999, as set forth in the following table:


                                       6
<PAGE>

TRACK 'N TRAIL STORES
<TABLE>
<CAPTION>
                                                     CURRENT                                                       CURRENT
STATE                                                 STORES     STATE                                              STORES
-----                                                 ------     -----                                              ------
<S>                                                 <C>        <S>                                                <C>
Alabama.....................                              1      Michigan....................                           10
Alaska .....................                              2      Minnesota ..................                            4
Arkansas....................                              1      Missouri ...................                            1
California..................                             25      North Carolina .............                            3
Colorado....................                              5      Nebraska ...................                            1
Connecticut.................                              4      Nevada......................                            1
Florida  ...................                              6      New Hampshire...............                            3
Georgia ....................                              5      New York....................                            8
Idaho.......................                              1      Ohio........................                            4
Illinois....................                              9      Oregon......................                            4
Indiana.....................                              5      Pennsylvania................                            3
Iowa .......................                              1      South Carolina .............                            2
Kentucky ...................                              3      Tennessee...................                            2
Louisiana ..................                              1      Texas ......................                            7
Maine.......................                              2      Virginia....................                            4
Maryland....................                              1      Washington..................                            7
Massachusetts...............                              4      Wisconsin...................                            4





OVERLAND TRADING STORES
<CAPTION>
                                                   CURRENT                                                        CURRENT
STATE                                               STORES       STATE                                             STORES
-----                                               ------       -----                                             ------
<S>                                                 <C>        <S>                                                   <C>
California  ................                             2       New Jersey..................                           4
Connecticut ................                             3       New York....................                           9
Florida ....................                             3       Ohio........................                           5
Georgia ....................                             2       Pennsylvania..............                             2
Kentucky ...................                             1       Tennessee  .................                           4
Massachusetts ..............                             8       Virginia ...................                           4
Michigan ...................                             1

EAGLES NEST STORES
<CAPTION>
                                                   CURRENT                                                        CURRENT
STATE                                               STORES       STATE                                             STORES
-----                                               ------       -----                                             ------
<S>                                                <C>        <S>                                                   <C>
Colorado ...................                             4       Nevada  ....................                           1
Michigan....................                             1       Virginia ...................                           1
</TABLE>

          In connection with the restructuring plan adopted in December 1999,
the Company expects to close approximately 42 stores in the first 120 days of
fiscal 2000. The Company leases all of its store space. Initial lease terms
of the Company's stores generally range from eight to ten years in duration
without renewal options, ten-year leases being the most common. The leases
generally provide for a fixed minimum rental plus a percentage of store sales
in excess of a specified amount.

MARKETING

          The Company's policy is to price its merchandise competitively with
department stores and specialty retailers in the particular mall in which
each Company store is located. The Company is primarily a full-price
retailer, selling most merchandise at full retail prices. However, the
Company conducts promotions that generally revolve around themes such as
back-to-school, and holiday seasons. In addition, the Company promotes
individual items as needed to increase sales activity.


                                       7
<PAGE>

          The Company relies primarily on mall traffic and the visual appeal
of its stores to attract customers, and on the breadth of its product
offering and the quality of its customer service to retain them. In-store
promotions with point-of-purchase materials are also an important part of the
Company's marketing strategy. The Company also takes advantage of advertising
and promotional assistance from many of its suppliers, which takes the form
of cooperative advertising programs, point-of-purchase materials, product
training for employees and other programs. The Company spends very little on
advertising, primarily contributing to mall merchant association funds which
advertise both the mall and individual stores within the mall.

DISTRIBUTION

          The Company believes that strong distribution support for its
stores is a critical element in its strategy to maintain a low cost operating
structure and to expand in the future. In order to support the needs of a
growing store base, the Company relocated its central distribution center in
fiscal 1998 to a larger facility located in West Sacramento, California,
approximately 30 miles from the previous location in El Dorado Hills,
California. The facility contains approximately 50,000 square feet of storage
space that the Company believes will provide distribution support for up to
500 stores.

          The Company receives approximately 85% of its merchandise at its
central distribution center in West Sacramento, California. Other merchandise
is drop-shipped from vendors directly to individual stores. The Overland
Trading stores currently receive a higher proportion of drop-shipped
merchandise than the Track 'n Trail stores. Virtually all of the merchandise
for the Eagles Nest stores was drop-shipped.

          The central distribution center is operated primarily as a
"cross-docking" facility rather than as a warehouse. The Company attempts to
retain minimal inventory at this facility, although it will occasionally
back-stock high-demand items that are expected to be in short supply and
inventory for peak seasonal needs. The central distribution center has
multi-access docks, enabling the Company to receive and ship simultaneously
and to pack separate trailers for shipments to different regions of the
country at the same time.

          Upon receipt at the central distribution center, merchandise is
inspected, recorded in the Company's management information system, allocated
to stores by the system's automatic replenishment function, processed and
repackaged for distribution. Merchandise is typically shipped via common
carrier from the central distribution center to the various stores once a
week, or more often as needed during peak seasonal periods.

MANAGEMENT INFORMATION SYSTEMS

          The Company has a computerized management information system that
includes a network of terminals at the corporate offices to support
management decision making, along with PC-based POS computers at the stores
that are connected via modem to the computers at the corporate offices. Each
store's POS system accumulates detailed sales transaction data that is polled
by the Company's main system nightly and reviewed by management each day. The
system's perpetual inventory feature enables the Company's buyers to review
and analyze daily the inventory levels at each individual store by
department, class and SKU in order to replenish fast-selling items on a
timely basis. The system also includes an automated replenishment system for
core products that orders replacement stock of such products based on factors
such as current sales trends or store inventory levels. The minimal inventory
that is maintained at the Company's central distribution center is also
managed through daily inventory management reports. In January 1999, the
Company upgraded the computer hardware at its corporate offices to
accommodate its current and presently anticipated growth.

COMPETITION

          The business in which the Company is engaged is highly competitive.
Most of the items sold by the Company are sold by department stores, outdoor
and sporting goods stores, athletic footwear and apparel stores and
traditional shoe and apparel stores. Some of these stores are owned or
franchised by major suppliers of the Company. Many of the stores with which
the Company competes are units of large national and regional chains that
have substantially greater


                                       8
<PAGE>

financial and other resources than the Company. To a lesser extent, the
Company competes with mail order and e-commerce retailers. In many cases, the
Company's stores are located in shopping malls in which one or more of its
competitors also has a store.

          The Company believes that it has been able to compete favorably
with its competitors by operating attractive, well-stocked stores in high
retail traffic areas, offering competitive prices and providing knowledgeable
and courteous customer service. The Company seeks to provide competitive
pricing by effectively mixing high profile, brand name merchandise with
private label merchandise and opportunistic purchases of other brand name
merchandise, and by controlling both store and administrative expenses.

EMPLOYEES

          As of December 25, 1999, the Company had approximately 1,100
full-time employees and 880 part-time employees, none of whom is represented
by a labor union. The number of part-time employees fluctuates depending on
seasonal needs. The Company considers its relationship with its employees to
be good and has not experienced any interruptions of operations due to labor
disagreements.

RISK FACTORS

          THIS REPORT CONTAINS, IN ADDITION TO HISTORICAL INFORMATION,
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE
COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE RESULTS DISCUSSED
IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE THOSE DISCUSSED BELOW, AS WELL AS THOSE DISCUSSED
ELSEWHERE IN THIS REPORT.

RISKS ASSOCIATED WITH EXPANSION

          The Company's continued growth will depend largely upon the
Company's ability to open or acquire new stores in a timely manner and to
operate them profitably. The Company opened 18 stores in fiscal 1999 and 47
stores (including the five Eagles Nest stores acquired in August 1998) in
fiscal 1998. The Company plans on closing 42 marginal or unprofitable stores
and one store located in a temporary location in fiscal 2000 (including all
the Eagles Nest stores) and plans on scaling back store openings in 2000
until sustained comparable store gains are achieved. Thus, the Company
presently anticipates opening four stores in fiscal 2000. The success of the
Company's future expansion efforts will depend on many factors, including the
Company's ability to secure suitable store sites on satisfactory leasing
terms and to complete any necessary construction or refurbishment of these
sites, the hiring, training and retention of qualified managers and other
personnel and the successful integration of new stores into existing
operations. No assurance can be given that the Company will be able to expand
as planned, that new stores will provide a positive contribution to the
Company's operating results, or that the Company will be able to manage any
future growth successfully. Because the Company's business is highly
seasonal, any delays in store openings past peak selling periods could
significantly reduce the new stores' near-term contribution to total net
sales. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations".

RISKS ASSOCIATED WITH IMPLEMENTING RESTRUCTURING PLAN

          During fiscal 1999, the Company adopted a restructuring plan to
close 42 marginal or unprofitable stores (including all seven Eagles Nest
stores) and a regional office facility. However, the Company's ability to
close stores as scheduled is subject to a number of factors, including its
ability to negotiate favorable lease termination provisions, dispose of
inventory, and handle employee matters on a timely basis. The Company's
inability to implement planned closures on schedule or at the expected costs
could have an adverse effect on its operating results. Additionally, the
closing of the 42 stores could have an adverse effect on the Company's
ability to obtain new store locations in the future. In addition, the Company
continually evaluates store profitability, and there can be no assurance that
the number of future store closings will not change.

NASDAQ STOCK MARKET LISTING


                                       9

<PAGE>

          The Company's common stock is currently included in the Nasdaq
Stock Market and designated as a Nasdaq National Market security. In order
for the common stock to continue to be designated as a Nasdaq National Market
security and included in the Nasdaq Stock Market, the Company and its common
stock must meet certain quantitative maintenance criteria which include,
among other things, requirements that (1) the Company maintain $4,000,000 in
total assets, (2) the bid price of the common stock be at least $1.00, (3) at
least 750,000 shares of the common stock be held by persons who are not
affiliates of the Company, and (4) the shares held by non-affiliates of the
Company have an aggregate market value of at least $5,000,000. In addition,
continued inclusion in the Nasdaq Stock Market requires two registered and
active market-makers. As of March 20, 2000, the Company had nine registered
and active market-makers, and based on the closing bid price of the Company's
common stock of $1.125, the aggregate market value of the 3,024,282 shares
held by non-affiliates was approximately $3,402,317. In November 1999, the
Nasdaq Stock Market notified the Company that its common stock would be
delisted effective February 17, 2000, if the Company's common stock did not
achieve compliance with the maintenance criteria established for Nasdaq
National Market securities. The Company appealed the Nasdaq Stock Market's
determination and a hearing was held on March 9, 2000. The Company expects to
receive the results of the hearing on or about March 28, 2000, at which time
the Company's common stock could be delisted from the Nasdaq Stock Market,
and trading, if any, in the Company's common stock would thereafter be
conducted in the Nasdaq SmallCap Market (if eligible) or the non-Nasdaq
over-the-counter market. As a result of such delisting, an investor could
find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's common stock.

DEPENDENCE ON MAJOR SUPPLIERS

          The Company's business depends to a significant degree upon its
ability to obtain timely and plentiful shipments of brand name merchandise at
competitive prices. In fiscal 1999, the Company's ten largest suppliers
accounted for approximately 66.6% of its net sales. The extent to which the
Company is dependent upon any particular supplier varies from season to
season. The Company does not have any long-term supply agreements or other
contractual assurances of continued supply, pricing or access to new
products. The deterioration of the Company's relationship with any key vendor
could result in delivery delays, merchandise shortages or less favorable
trade terms than the Company currently enjoys. The Company has occasionally
received allocations of merchandise from vendors, particularly merchandise in
high demand by many footwear retailers, that are insufficient to meet the
Company's desired inventory levels of such merchandise. There can be no
assurance that the Company will receive its desired levels of such
merchandise in the future. The Company's business is also affected by its
suppliers' ability to manufacture and deliver merchandise in a timely and
cost-effective manner, which depends upon a number of factors beyond the
Company's control, including fluctuations in currency exchange rates, trade
barriers, and economic, labor and political conditions in the countries in
which the Company's vendors have manufacturing operations.

UNCERTAINTIES IN MERCHANDISE TRENDS

          The Company's success depends in part on its ability to anticipate
and respond to changing merchandise trends and consumer demands in a timely
manner. Any failure by the Company to identify and respond to emerging trends
could adversely affect consumer acceptance of the merchandise in the
Company's stores, which in turn could adversely affect the Company's
business, financial condition and results of operations. Failure to
anticipate and respond to changing consumer preferences could lead to, among
other things, shortages of styles in high demand, lower net sales, additional
markdowns and lower margins, which would have a material adverse effect on
the Company's results of operations and financial condition.

DEPENDENCE ON MALL TRAFFIC

          All but two of the Company's stores are located in regional or
super-regional shopping malls. The Company's net sales are derived, in large
part, from the volume of traffic in these malls, particularly because the
Company does little independent advertising to attract customers. The Company
therefore depends upon the ability of mall "anchor" tenants and other mall
attractions to generate consumer traffic in the vicinity of the Company's
stores, as well as the continuing popularity of malls as shopping
destinations. Mall traffic and the Company's net sales and profitability may
be adversely affected by "anchor" tenants or declines in the desirability of
the shopping environment in a particular mall. As with


                                       10
<PAGE>

other specialty footwear retailers, the Company's business is also subject to
general economic conditions, including the possibility of a nationwide
recession, consumer confidence and the level of consumer spending.

SEASONALITY; WEATHER

          The Company's business is highly seasonal. The Company typically
incurs losses in the first three months of each fiscal year and recorded a
larger loss in the first quarter of fiscal 1999 than in the first quarter of
fiscal 1998, due to the fixed operating costs associated with a larger store
base during a period of historically low sales. The Company derives a
substantial percentage of its annual net sales and operating profitability
during the "back-to-school" and year-end holiday periods. In anticipation of
increased net sales activity during these periods, the Company incurs
significant additional expenses, including the hiring of a substantial number
of temporary employees. A slowdown in sales during these peak periods will
tend to have a particularly pronounced effect on the Company's results of
operations. In addition, as a result of this seasonality, the Company's
working capital needs are greatest in October and early November, and late in
the first quarter of each fiscal year. The Company's net sales are also
affected by weather patterns, particularly during the Spring and Fall selling
seasons. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources."

COMPETITION

          The retail footwear business is intensely competitive. Most of the
items sold by the Company are sold by department stores, outdoor and sporting
goods stores, athletic footwear and apparel stores and traditional shoe and
apparel stores. Some of these stores are owned or franchised by the Company's
footwear suppliers. Many of the stores with which the Company competes are
units of large national or regional chains that have substantially greater
financial and other resources than the Company. In many cases, the Company's
stores are located in shopping malls in which one or more of its competitors
also has a presence. To a lesser extent, the Company also competes with mail
order and e-commerce retailers. A significant change in price, level of
promotion or other strategies by the Company's competitors could have a
material adverse effect on the Company's results of operations. See
"Business--Competition" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."


UNCERTAINTIES ASSOCIATED WITH PRIVATE LABEL SOURCING

          The Company has no long-term contracts with its private label
manufacturing sources and competes with other companies for production
facilities. In addition, the Company's private label products may experience
higher mark-downs than branded products, because they require longer lead
times and must be ordered in larger volumes, and because the Company is
typically unable to return private label product to its manufacturers. There
can be no assurance that the foregoing factors will not disrupt the Company's
supply of private label goods or otherwise adversely impact the Company's
operations in the future. See "Business--Purchasing and Sourcing."

INTERNATIONAL PURCHASING RISKS

          Substantially all of the Company's private label manufacturers are
located outside of the United States. Accordingly, the Company is subject to
the risks typically associated with an import business, including unexpected
changes in foreign regulatory requirements, disruptions or delays in
shipments and the risks associated with United States import laws and
regulations, including quotas, duties, taxes, tariffs and other restrictions.
The Company has not, to date, been materially affected by any such risk, but
there can be no assurance that such risks will not adversely impact the
Company's operations in the future. See "Business--Purchasing and Sourcing."

POTENTIAL FOREIGN CURRENCY FLUCTUATIONS

          Because a portion of the Company's purchases of private label goods
are denominated in foreign currencies, the Company's operating results are
subject to fluctuations in the exchange rates between such currencies and the
U.S. dollar. The Company has not typically engaged in hedging transactions
designed to manage currency fluctuation risks.


                                       11
<PAGE>

There can be no assurance that exchange rate fluctuations will not have a
material adverse effect on the Company's future operating results or
financial condition. See "Business--Purchasing and Sourcing."

RISKS ASSOCIATED WITH YEAR 2000

          The Company did not experience any significant operating problems
associated with the transition of its information systems to the Year 2000.
However, although it is past January 1, 2000, no assurance can be given that
the Company and its suppliers and customers have not been affected in a
manner that is not yet apparent. As a result, the Company expects to continue
to monitor its Year 2000 compliance and the compliance of its suppliers and
customers.

RISKS ASSOCIATED WITH ACQUISITIONS

          The Company's business strategy includes expanding when appropriate
through acquisitions, as well as through new store openings. No assurance can
be given that any acquisition by the Company will occur, or that any such
acquisition will enhance the Company's results of operations. Any acquisition
will involve numerous risks, including difficulties in the assimilation of
the acquired company's operations, the diversion of management's attention,
uncertainties associated with operating stores in new markets and the
potential loss of the acquired company's key employees. Acquisitions may also
result in potentially dilutive issuances of equity securities, the incurrence
of debt and contingent liabilities, potential reductions in income due to
losses incurred by the acquired business and increased amortization expense
related to intangible assets acquired, any of which could materially
adversely affect the Company's financial condition and results of operations.

CONTROL BY CERTAIN STOCKHOLDERS

          David L. Suechting, Jr., the Company's Chairman of the Board,
President and Chief Executive Officer, Barbara Suechting, a director of the
Company, and Deborah Landgrebe (the "Pre-Offering Stockholders") in the
aggregate own beneficially approximately 57% of the Company's outstanding
shares of Common Stock. As a result, the Pre-Offering Stockholders, acting
together, are able to control all matters requiring approval by the
stockholders of the Company, including the election of the Board of Directors.


FUTURE CAPITAL NEEDS

          The Company expects that anticipated cash flow from operations and
anticipated borrowings under its credit facility will satisfy its cash
requirements through fiscal 2000. To the extent that the foregoing cash
resources are insufficient to fund the Company's activities, including new
store openings planned for 2000, additional funds will be required. There can
be no assurance that additional financing will be available on reasonable
terms or at all. Failure to obtain such financing could delay or prevent the
Company's planned expansion, which could adversely affect the Company's
business, financial condition and operating results. In addition, if
additional capital is raised through the sale of additional equity or
convertible securities, dilution to the Company's stockholders could occur.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations--Liquidity and Capital Resources."

DEPENDENCE ON KEY PERSONNEL

          The Company's future success depends to a significant extent on the
efforts and abilities of its executive officers. The loss of the services of
certain of these individuals could have a material adverse effect on the
Company's business, financial condition and results of operations. The
Company does not maintain any key man life insurance. The Company's recent
growth has resulted in an increase in responsibilities for management
personnel. The Company's ability to manage growth effectively will require it
to continue to train, motivate and manage its employees, and to attract,
motivate and retain additional skilled managerial and merchandising
personnel. Competition for such personnel


                                       12
<PAGE>

is intense, and there can be no assurance that the Company will be successful
in attracting, assimilating and retaining the personnel it requires to grow
and operate profitably.

INTELLECTUAL PROPERTY

          Prior to being acquired by Track 'n Trail, Overland entered into an
agreement with a third party for the exclusive use of the Overland Trading
Company trademark in nine Midwestern states. The agreement prohibits the
Company from opening Overland Trading stores in those states until the
agreement is terminated. There can be no assurance that the activities of the
third party will not detract from the Company's efforts to maintain its
Overland Trading stores as a distinct retail concept, particularly in the
Midwest, or from the Company's reputation.

ITEM 2. PROPERTIES

          The Company has a lease on a single 50,240 square foot distribution
center in West Sacramento, California expiring on October 31, 2008. The
Company believes that its central distribution facility will support as many
as 500 stores, which the Company believes is sufficient to continue to
service existing stores and to accommodate anticipated growth. In 1999, the
Company extended its current lease on its 16,000 square foot corporate office
facility located in El Dorado Hills, California for an additional 10 years.
This facility's lease expires on March 31, 2009. The Company also maintains a
5-year lease on a 2,681 square foot office facility in Littleton, Colorado to
support the sales operations and merchandising management team for the Eagles
Nest stores. This lease expires on October 31, 2001. As part of the
restructuring plan, the Company vacated this facility in January 2000 and is
currently negotiating lease exit terms with the landlord.

ITEM 3. LEGAL PROCEEDINGS

          Although the Company is subject to various claims and legal actions
that arise in the ordinary course of its business, the Company is not
presently a party to any material legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

          No matters were submitted to a vote of the Company's stockholders
during the fourth quarter of the fiscal year covered by this report.



PART II

ITEM 5. MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

          The Company's initial public offering of its common stock (the
"Offering") occurred in October 1997. The Company's common stock is listed on
the Nasdaq National Market under the symbol "TKTL". The following table sets
forth, for the quarterly periods indicated, the high and low prices per share
of common stock as reported by Nasdaq:

<TABLE>
<CAPTION>
                           FISCAL 1999                     FISCAL 1998
                           -----------                     -----------

                        HIGH         LOW                HIGH              LOW
                        ----         ---                ----              ---
<S>                 <C>          <C>                 <C>               <C>
   1st Quarter        $ 3.25       $ 1.75              $9.00            $ 4.75
   2nd Quarter          2.63         1.75               9.13              4.38
</TABLE>


                                       13

<PAGE>

<TABLE>
<S>                 <C>          <C>                 <C>               <C>
   3rd Quarter          4.00         1.63               5.44              3.50
   4th Quarter          2.00         0.94               3.63              1.88
</TABLE>
          As of February 22, 2000 there were 72 holders of record of the
Company's common stock.

          The Company has never paid or declared any cash dividends on its
common stock or other securities and does not anticipate paying cash dividends
in the foreseeable future. In addition, the Company's current line of credit
prohibits the payment of cash dividends on its capital stock without the
bank's consent.


ITEM 6. SELECTED FINANCIAL DATA

          The balance sheet and statement of operations data as of December
25, 1999 and December 26, 1998, and for each of the three fiscal years in the
period ended December 25, 1999, are derived from audited consolidated
financial statements of the Company included herein and should be read in
conjunction with such financial statements. The balance sheet and statement of
operations data as of December 27, 1997, December 28, 1996 and December 30,
1995, and for each of the two fiscal years in the period ended December 28,
1996 are derived from audited consolidated financial statements of the Company
which are not included herein. The information for all periods set forth below
under the captions "Pro Forma Statement of Operations Data" and "Selected
Store Operating Data" is derived from unaudited data. The data set forth below
are qualified by, and should be read in conjunction with, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and related notes included elsewhere in
this report.

<TABLE>
<CAPTION>
                                                                                  Fiscal Year Ended
                                                             1999        1998            1997           1996         1995
                                                            ------      ------          ------         ------       ------
                                           (Dollars in thousands, except per share, per square foot and number of stores data)

<S>                                                      <C>            <C>            <C>            <C>           <C>
STATEMENT OF OPERATIONS DATA:
Net Sales...........................................     $ 114,758      $ 99,851       $ 91,834       $ 66,233      $ 50,691
Cost of sales.......................................        64,896        53,615         47,677         34,062        26,192
                                                        ----------     ---------      ---------      ---------     ---------
</TABLE>


                                       14
<PAGE>

<TABLE>
<S>                                                      <C>            <C>            <C>            <C>           <C>
Gross profit .......................................        49,862        46,236         44,157         32,171        24,499
                                                        ----------     ---------      ---------      ---------     ---------
Selling and marketing expense.......................        46,034        37,186         30,780         21,060        16,852
Administrative and distribution.....................         9,741         7,741          6,840          5,508         4,826
Restructuring and impairment........................         8,994           122             --             --            --
                                                        ----------     ---------      ---------      ---------     ---------

Operating income (loss).............................       (14,907)        1,187          6,537          5,603         2,821
Interest expense....................................         1,226           369          1,260            670           435
Other expense (income)..............................           174            51            (21)           (24)          (41)
                                                        ----------     ---------      ---------      ---------     ---------

Income (loss) before income taxes and
    minority interest...............................       (16,307)          767          5,298          4,957         2,427
Income tax provision (benefit)......................        (5,187)          371            118            488            41
Minority interest ..................................            --            --             --            105            --
                                                        ----------     ---------      ---------      ---------     ---------

Net income (loss) ..................................     $ (11,120)     $    396       $  5,180       $  4,364      $  2,386
                                                        ==========     =========      =========      =========     =========

Historical earnings(loss) per share (1):
   Basic............................................     $   (1.62)     $    .06       $   1.10       $   1.06      $   0.58
                                                        ==========     =========      =========      =========     =========
   Diluted..........................................     $   (1.62)     $    .06       $   1.03       $   1.04      $   0.58
                                                        ==========     =========      =========      =========     =========
Weighted average shares outstanding:
   Basic............................................         6,881         6,847          4,700          4,108         4,108
                                                       ===========     =========       ========      =========     =========
   Diluted..........................................         6,881         7,154          5,027          4,202         4,108
                                                       ===========     =========       ========      =========     =========


PRO FORMA STATEMENT OF OPERATIONS DATA (2):
Historical income before income taxes
     and minority interest..........................                                   $  5,298       $  4,957      $  2,427
Pro forma income tax expense (2) ...................                                      2,119          1,983           971
Minority interest...................................                                         --            105            --
                                                                                       --------      ---------     ---------

Pro forma net income................................                                   $  3,179       $  2,869      $  1,456
                                                                                       ========      =========     =========

Pro forma earnings per share (1):
  Basic.............................................                                   $   0.68       $   0.70
                                                                                       ========      =========
  Diluted...........................................                                   $   0.58       $   0.57
                                                                                       ========      =========
Weighted average shares outstanding:
   Basic............................................                                      4,700          4,108
                                                                                       ========      =========
   Diluted..........................................                                      5,448          5,030
                                                                                       ========      =========



SELECTED STORE OPERATING DATA:
Store contribution(3)...............................     $  3,828       $   9,050      $ 13,377       $ 11,111      $  7,647
Number of stores:
     Opened or acquired during period ..............           18              47(4)         22             51(5)         12
     Closed during period ..........................           11               5             0              5             4
     Open at end of period..........................          199(6)          192           150            128            82
 Total weighted average square feet(7)..............      377,006         306,737       236,095        168,966       144,612
Weighted average net sales per square foot..........     $    304       $     326      $    389       $    392      $    351
Average square feet per store.......................        2,021           1,937         1,780          1,744         1,873
Increase(decrease) in comparable stores net sales(8)          2.5%           (9.1)%         0.6%           3.1%         (1.4)%

</TABLE>



<TABLE>
<CAPTION>

                                                                                      AS OF
                                                 DECEMBER 25,     DECEMBER 26,     DECEMBER 27,     DECEMBER 28,     DECEMBER 30,
                                                    1999             1998              1997            1996              1995
                                                --------------   --------------   --------------   --------------   --------------
                                                                              (Dollars in thousands)
<S>                                              <C>              <C>              <C>              <C>              <C>
BALANCE SHEET DATA:
Working capital............................      $   7,122        $  25,116        $  21,896        $   9,430        $   6,710
Total assets...............................         60,185           61,279           44,133           31,858           17,050
Total debt.................................         15,539           11,510              236           10,765            2,734
Stockholders' equity.......................         21,550           32,538           32,082           10,646            7,648

</TABLE>


(1)  Shares outstanding include approximately 307,000, 327,000 and 94,000 shares
     issuable upon exercise of stock options outstanding at December 26, 1998,
     December 27, 1997 and December 28, 1996, respectively, after applying the
     treasury stock method. In applying the treasury stock method for
     determining the dilution applicable to stock options outstanding, the



                                      15

<PAGE>

     incremental shares assumed issued (excess of shares assumed issued over the
     number of shares assumed purchased) was determined using the sum of
     exercise proceeds, future compensation and the tax benefit to the Company
     upon exercise of the options as the assumed proceeds that would have been
     used to purchase shares at the average value during the period. Average
     market value was based on estimated fair values for periods prior to the
     Company's initial public offering in October 1997 (the "Offering") and
     market prices thereafter. Distribution shares of approximately 421,000
     included in pro forma diluted earnings per share for fiscal 1997 represents
     the number of shares of Common Stock sold in the Offering, the proceeds of
     which were necessary to pay the excess of S corporation distributions paid
     or declared during the twelve month period preceding the Offering over
     earnings during the twelve month period preceding the Offering.
     Distribution shares of approximately 828,000 included in pro forma diluted
     earnings per share for fiscal 1996 represent the number of shares of Common
     Stock sold in the Offering, the proceeds of which were necessary to pay the
     excess of S corporation distributions paid or declared during fiscal 1996
     through the Offering over fiscal 1996 earnings. All warrants outstanding
     and certain options with exercise prices in excess of market value were not
     dilutive and, accordingly, were not included.

(2)  Includes pro forma provision for income taxes using an assumed combined
     federal and state tax rate of 40%, which the Company believes approximates
     the statutory federal and state income tax rates that would have been
     applied had Track 'n Trail-California been taxed as a C corporation.
     Commencing June 28, 1992 and until the Reorganization, Track 'n
     Trail-California operated as an S corporation and was not subject to
     federal and certain state income taxes. The Company's earnings during such
     periods have been taxed directly to the Company's stockholders, rather than
     to the Company. In connection with the Reorganization on October 7, 1997,
     the S corporation election of Track 'n Trail-California and the Company,
     respectively, was terminated under circumstances under which income
     reported by the Company and Track 'n Trail-California for their respective
     terminated S corporation taxable years was determined utilizing a "closing
     of the books" method.

(3)  Store contribution refers to gross profit after deducting selling and
     marketing expenses. Store contribution is presented to provide additional
     information about the Company and is commonly used as a performance
     measurement by retail companies. Store contribution should not be
     considered in isolation or as a substitute for operating income, cash flow
     from operating activities and other income or cash flow data prepared in
     accordance with generally accepted accounting principles, or as a measure
     of the Company's profitability or liquidity.

(4)  On August 26, 1998, the Company acquired five Eagles Nest stores.

(5)  On October 25, 1996, the Company acquired 33 Overland Trading stores.

(6)  Stores open at the end of fiscal 1999 consist of 144 Track 'n Trail stores,
     48 Overland Trading stores and seven Eagles Nest stores.

(7)  Weighted to reflect store openings and closings during each period.

(8)  Comparable store net sales include only those stores that were open both
     for the full fiscal period and for the full prior fiscal period.







ITEM 7.   MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

          PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT. In
addition to historical information, this Management's Discussion and Analysis
includes certain forward-looking statements regarding events and financial
trends which may affect the Company's future operating results and financial
position. Such statements are subject to risks and uncertainties that could
cause the Company's actual results and financial position to differ
materially. Factors that could cause or contribute to such differences include
those discussed below. These and other risks and uncertainties related to the
business are described in detail in this report. See "Business--Risk Factors."
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. The following
discussion should be read in conjunction with the financial statements and
notes thereto of the Company included elsewhere in this report.

          The Company is one of the largest full-service specialty retailers
in the United States focusing on a broad range of high-quality branded casual,
outdoor and adventure footwear. On August 26, 1998, the Company acquired the


                                      16
<PAGE>

outstanding common stock of Nevin's Eagles Nest, Inc. ("Eagles Nest") for $1.5
million in cash. Eagles Nest is a mall-based retailer primarily of premium
branded outdoor apparel and operates seven stores in four states. As is common
in the apparel industry, Eagles Nest margins are lower than those that the
Company currently experiences in its footwear business.

          During fiscal 1999, the Company adopted a formal restructuring plan
which includes provisions to close of all the Eagles Nest locations, 31 Track
'n Trail stores and four Overland Trading stores (see "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Restructuring
Expense/Asset Impairment Charge"). As of December 25, 1999, the Company
operated 144 Track 'n Trail stores, 48 Overland Trading stores and seven
Eagles Nest stores in 35 states.

          Comparable store sales are commonly used as a performance
measurement by retail companies. The Company defines comparable stores as
those stores that were open for the full fiscal period and for the full prior
fiscal year. The Company's comparable store net sales increased 2.5% in fiscal
1999, excluding the acquired Eagles Nest stores. Had the Eagles Nest stores
acquired by the Company on August 26, 1998 been included in the Company's
comparable store net sales comparison since the acquisition, comparable store
net sales would have increased by 2.1% in fiscal 1999.

          Track 'n Trail-California was treated as an S corporation for
federal and certain state income tax purposes from June 28, 1992, until its S
corporation status terminated and it became a wholly owned subsidiary of the
Company as a result of the Reorganization on October 7, 1997 (the "Termination
Date"). As a result, the earnings of Track 'n Trail-California during such
period were taxed, with certain exceptions, directly to the stockholders of
Track 'n Trail-California rather than to Track 'n Trail-California.
Thereafter, the Company has been subject to state and federal income taxes as
a C corporation, and all references to net income for periods prior to fiscal
1998 in this "Management's Discussion and Analysis of Financial Condition and
Results of Operations" are presented as if Track 'n Trail-California, prior to
the Reorganization, had been subject to income taxes at a combined state and
federal income tax rate of 40%.

RESULTS OF OPERATIONS

          The following table sets forth certain operating data as a percentage
of net sales for the periods indicated:

<TABLE>
<CAPTION>
                                                          Fiscal

                                              1999         1998          1997
                                            --------     --------      -------
<S>                                          <C>          <C>          <C>
Net sales ...........................        100.0%       100.0%       100.0%
Cost of sales........................         56.6         53.7         51.9
                                            --------     --------      -------

Gross profit.........................         43.4         46.3         48.1
Selling and marketing expenses.......         40.1         37.2         33.5
                                            --------     --------      -------

Store contribution (1) ..............          3.3          9.1         14.6
Administrative and distribution
     expenses .......................          8.5          7.8          7.5
Restructuring and impairment.........          7.8          0.1           --
                                            --------     --------      -------

Operating income(loss)  .............        (13.0)         1.2          7.1
Interest expense.....................          1.1          0.4          1.4
Other (income) expense ..............          0.1          0.0         (0.1)
                                            --------     --------      -------

Income (loss) before income taxes ...        (14.2)         0.8          5.8
Income tax provision (benefit) (2) ..         (4.5)         0.4          2.3
                                            --------     --------      -------

Net income(loss) (2) ................                       0.4%         3.5%
                                            ========     ========      =======
</TABLE>

(1)  Store contribution refers to gross profit after deducting selling and
     marketing expenses. Store contribution is presented to provide additional
     information about the Company and is commonly used as a performance
     measurement by retail companies. Store contribution should not be
     considered in isolation or as a substitute for operating income, cash flow
     from operating activities and other income or cash flow data prepared in
     accordance with generally accepted accounting principles, or as a measure
     of the Company's profitability or liquidity.

(2)  For 1997, reflects an assumed combined federal and state tax rate of 40%,
     which the Company believes approximates the statutory federal and state
     income tax rates that would have been applied had Track 'n Trail-California
     been taxed as a C corporation. From June 28, 1992, through the Termination
     Date, Track 'n Trail-California operated as an S corporation and was not
     subject to federal and certain state income taxes.


RESTRUCTURING EXPENSE/ASSET IMPAIRMENT CHARGE



                                      17
<PAGE>

          During fiscal 1999, declining operating results of certain of the
Company's stores led to the adoption of a restructuring plan. Under the
restructuring plan, the Company intends to close stores during the first 120
days of fiscal 2000 consisting of 31 Track 'n Trail stores, four Overland
Trading stores and all seven Eagles Nest stores along with the regional office
in Colorado. The decision to close the stores and the regional office was
based on store performance combined with market economic factors and projected
future cash flows. During fiscal 1999, in connection with the restructuring
plan, the Company recorded charges to operations for restructuring costs,
asset impairments and inventory reserves of $12.8 million. The charge included
$9.0 million of restructuring costs and asset impairments, including (1) a
write-down of leasehold improvements of $2.7 million, (2) lease termination
and other related costs of $4.4 million, (3) impairment of goodwill of $1.8
million, representing the unamortized goodwill in connection with the
Company's acquisition of Eagles Nest and (4) accrual of employee severance
payments of $82,000 to 12 administrative employees. Approximately 291 store
employees were terminated without severance. Additionally, the Company
recorded charges of $3.8 million in cost of sales to reduce inventory to its
net realizable value in the 42 stores scheduled for closure. The net cash
impact of this plan in fiscal 2000 is expected to be minimal, as cash
restructuring costs will likely be offset by inventory reduction and operating
loss reduction associated with the store closings.

          The Company commenced the restructure plan in late December 1999 and
anticipates to substantially complete the plan by the second quarter of fiscal
2000. Accruals for restructuring costs and asset impairments were made in
December 1999 when the restructuring plan was approved by the Company's Board
of Directors. See Note 4 of Notes to Consoldiated Financial Statements for
further information regarding the Company's restructuring and impairment
charge.

          In addition to the restructure and asset impairment charges incurred
during fiscal 1999, the Company incurred $493,000 in severance and related
expenses in connection with management changes.


FISCAL 1999 COMPARED TO FISCAL 1998

          NET SALES

          Net sales increased to $114.8 million in fiscal 1999, an increase of
$14.9 million, or 14.9%, over fiscal 1998 net sales of $99.9 million. The 18
stores opened by the Company in fiscal 1999 generated $3.2 million in net
sales. The 37 Track 'n Trail and Overland Trading stores (net of closures)
opened in fiscal 1998 were responsible for $10.3 million more in net sales in
fiscal 1999 than in fiscal 1998 and the five Eagles Nest stores acquired in
fiscal 1998 contributed $3.2 million more in net sales in fiscal 1999 than in
fiscal 1998. In addition, comparable store net sales increased $2.0 million,
or 2.5% for fiscal 1999. These additions to net sales were partially offset by
approximately $3.3 million, relative to fiscal 1998, in net sales attributable
to the closing of 11 stores during fiscal 1999 and a $454,000 decrease,
relative to fiscal 1998, in net sales attributable to the remodeling of two
stores in fiscal 1999. The increase in comparable store net sales is primarily
due to a successful summer sandal season as well as to a less competitive
market than experienced during 1998 as a result of competitor store closures.

          GROSS PROFIT

          Gross profit was $49.9 million for fiscal 1999, an increase of $3.6
million, or 7.8%, over the gross profit for fiscal 1998. The increase in gross
profit is due to a reduction in markdowns taken in 1999 from markdowns taken
in 1998 in response to competitor discounting. This increase was offset by a
$3.8 million decrease due to the writedown of the inventory in the 42 stores
scheduled for closure in fiscal 2000 under the restructuring plan to its net
realizable value. Gross profit as a percentage of net sales decreased to 43.4%
for fiscal 1999 from 46.3% in fiscal 1998. The decrease in gross profit as a
percentage of sales is primarily attributable to the Eagles Nest stores, which
generally carry lower margin merchandise, and the writedown of the inventory
in the 42 stores scheduled for closure to its net realizable value. Excluding
these two factors, gross profit as a percentage of sales would have been 47.6%
in fiscal 1999, an increase of 1.3% over the gross profit of fiscal 1999.

          SELLING AND MARKETING EXPENSES



                                      18
<PAGE>

          Selling and marketing expenses were $46.0 million for fiscal 1999,
an increase of $8.8 million, or 23.8%, over the $37.2 million in selling and
marketing expenses for fiscal 1998. Approximately $2.6 million, or 29.6%, of
this increase is attributable to the Eagles Nest stores. The remaining
increase is primarily attributable to operating costs related to the 37 Track
'n Trail and Overland Trading Co. stores (net closures) opened in fiscal 1998
that were in operations for all of fiscal 1999 and the five additional Track
'n Trail and Overland Trading Co. stores (net closures) opened in fiscal 1999.
As a percentage of net sales, selling and marketing expenses increased to
40.1% in fiscal 1999 from 37.2% in fiscal 1998, primarily as a result of fixed
operating costs attributable to a larger base of new stores and increased
selling and marketing expenses required in connection with the assimilation of
the Eagles Nest store operations.

          ADMINISTRATIVE AND DISTRIBUTION EXPENSES

          Administrative and distribution expenses were $9.7 million for
fiscal 1999, an increase of $2.0 million, or 25.8%, over $7.7 million in
administrative and distribution expenses for fiscal 1998. Approximately
$480,000 of the increase in administrative and distribution expenses is
attributable to the Eagles Nest acquisition in August 1998, and $493,000 of
the increase is attributable to severance and related expenses associated with
changes in management. The remaining increase is primarily attributable to the
increases in personnel and related expenses associated with the Company's
expansion. As a percentage of net sales, administrative and distribution
expenses increased to 8.5% in fiscal 1999 from 7.8% in fiscal 1998, primarily
as a result of costs associated with changes in management.

          INTEREST EXPENSE

          Interest expense increased to $1.2 million, or 1.1% of net sales,
for fiscal 1999, from $369,000, or 0.4% of net sales in fiscal 1998. Interest
expense attributable to debt incurred in connection with the Eagles Nest
acquisition was $399,000, or 32.6% of total interest expense for fiscal 1999.
The remaining increase in interest expense is attributable to an increase of
the outstanding principal balance of the Company's credit facility due to the
expansion of the Company's store base.

          INCOME TAX PROVISION (BENEFIT)

          The Company's effective tax rate for fiscal 1999 and 1998 was 31.8%
and 48.4%, respectively. The variation in the effective rate for the tax
benefit in fiscal 1999 and the tax provision in fiscal 1998 is primarily
attributable to the effect of nondeductible goodwill and other permanent
differences and the recording of a valuation allowance of $500,000 against
state deferred tax assets in fiscal 1999.

          NET LOSS

          The Company incurred a net loss of $11.1 million in fiscal 1999
compared to recording a net income of $396,000 in fiscal 1998.

FISCAL 1998 COMPARED TO FISCAL 1997

          NET SALES

          Net sales increased to $99.9 million in fiscal 1998, an increase of
$8.0 million, or 8.7%, over fiscal 1997 net sales. The 42 stores opened by the
Company in fiscal 1998 generated $8.0 million in net sales. In addition, the
20 stores (net of closures) opened in fiscal 1997 were responsible for $5.9
million more in net sales in fiscal 1998 than in fiscal 1997 and, the five
Eagles Nest stores acquired in fiscal 1998 contributed $2.9 million in fiscal
1998. These additions to net sales were partially offset by a decrease in
comparable store net sales of $7.7 million, or 9.1%, for fiscal 1998, a
$378,000 decrease, relative to fiscal 1997, in net sales attributable to the
closing of five stores during fiscal 1998, and a $773,000 decrease, relative
to fiscal 1997, in net sales attributable to the relocation of three stores
and the remodeling of one store in fiscal 1998. The decrease in comparable
store sales is primarily due to the disruptions caused by unseasonable weather
conditions consisting of a wet and cold spring associated with El Nino and a
warm fall season. In addition, heavy discounting by competitors (related, in
part, to competitor store closures) put pressure on both the customer stream
and prices.



                                      19
<PAGE>
          GROSS PROFIT

          Gross profit was $46.2 million for fiscal 1998, an increase of $2.1
million, or 4.7%, over the gross profit for fiscal 1997. Approximately $1.2
million of the increase in gross profit is attributable to the Eagles Nest
stores acquired in 1998. Gross profit as a percentage of net sales decreased
to 46.3% for fiscal 1998 from 48.1% in fiscal 1997. This decrease was
primarily the result of markdowns taken to liquidate winter goods in the first
quarter and in response to competitor discounting in the third and fourth
quarters.

          SELLING AND MARKETING EXPENSES

          Selling and marketing expenses were $37.2 million for fiscal 1998,
an increase of $6.4 million, or 20.8%, over the $30.8 million in selling and
marketing expenses for fiscal 1997. Approximately $664,000, or 10.4%, of this
increase is attributable to the Eagles Nest stores acquired in 1998. The
remaining increase is primarily attributable to operating costs related to
operating 42 additional stores at December 26, 1998 versus December 27, 1997.
As a percentage of net sales, selling and marketing expenses increased to
37.2% in fiscal 1998 from 33.5% in fiscal 1997, primarily as a result of
operating a larger store base during a period in which the Company experienced
declining comparable store sales and opened new stores which have a lower
initial sales base.

          ADMINISTRATIVE AND DISTRIBUTION EXPENSES

          Administrative and distribution expenses were $7.7 million for
fiscal 1998, an increase of $901,000, or 13.2%, over $6.8 million in
administrative and distribution expenses for fiscal 1997. This increase is
primarily attributable to the increases in personnel and related expenses
associated with the Company's expansion and becoming a public company.
Approximately $201,000 of the increase in administrative and distribution
expenses is attributable to the Eagles Nest acquisition in August 1998. As a
percentage of net sales, administrative and distribution expenses increased to
7.8% in fiscal 1998 from 7.5% in fiscal 1997, predominately as a result of the
decrease in comparable store sales.

          INTEREST EXPENSE

          Interest expense decreased to $369,000, or 0.4% of net sales, for
fiscal 1998, from $1.3 million, or 1.4% of net sales, in fiscal 1997. This
decrease is primarily attributable to repayment of debt incurred in connection
with the acquisition of Overland and reduction of the outstanding principal
balance of the Company's credit facility from the proceeds from the Offering.
Interest expense attributable to debt incurred in connection with the Eagles
Nest acquisition was $88,000, or 23.9% of total interest expense for fiscal
1998.

          NET INCOME

          The Company's net income for fiscal 1998 was $396,000, a decrease of
$2.8 million, or 87.5 %, from $3.2 million in fiscal 1997. Approximately
$107,000 of net income for fiscal 1998 is attributable to the Eagles Nest
acquisition in August 1998. The decrease in net income of $2.9 million
(excluding Eagles Nest) is primarily attributable to fixed operating costs
associated with a larger store base during a period in which the Company
experienced declining comparable store sales and the start up costs associated
with a larger base of new stores in fiscal 1998.




QUARTERLY RESULTS OF OPERATIONS

          The Company typically incurs losses in the first quarter, and derives
a substantial percentage of its annual net sales and operating profitability
during the "back-to-school" and year-end holiday periods. The table below sets
forth quarterly operating data of the Company, including such data as a
percentage of net sales for fiscal 1999 and fiscal 1998. This quarterly
information is unaudited, but in management's opinion reflects all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the information for the periods presented when read in
conjunction with the audited consolidated financial statements of the Company
and notes thereto. The operating results for any quarter are not necessarily
indicative of results for any future period.


                                      20
<PAGE>

<TABLE>
<CAPTION>
                                                       Fiscal 1999                                     Fiscal 1998
                                       -------------------------------------------    ------------------------------------------
                                         FIRST      SECOND      THIRD     FOURTH         FIRST     SECOND      THIRD      FOURTH
                                        QUARTER    QUARTER     QUARTER    QUARTER       QUARTER    QUARTER    QUARTER    QUARTER
                                       --------   ---------   ---------  ---------      ---------  ---------  ---------  ---------

                                                                  (In thousands, except per share data)
<S>                                     <C>       <C>        <C>        <C>            <C>        <C>        <C>        <C>
Net sales ...........................   $23,324   $ 28,272   $ 29,671   $  33,491      $ 18,908   $ 22,311   $ 25,662   $ 32,970
Cost of sales........................    12,621     14,529     15,906      21,840        10,065     11,385     13,927     18,238
                                       --------   ---------  ---------  ----------    ----------  --------  ---------  --------

Gross profit.........................    10,703     13,743     13,765      11,651         8,843     10,926     11,735     14,732
Selling and marketing expenses.......    10,861     11,009     11,709      12,455         8,239      8,523      9,511     10,913
                                       --------   ---------  ---------  ----------    ----------  --------  ---------  ---------

Store contribution(1)................      (158)     2,734      2,056        (804)          604      2,403      2,224      3,819
Administrative and distribution
     expenses........................     2,405      2,299      2,090       2,947         2,007      1,908      1,945      1,881
Restructuring and impairment.........         -         -          -        8,994             -          -          -        122
                                       ---------  ---------  ---------  ----------    ----------  --------  ---------  ---------

Operating income (loss)..............  $ (2,563)  $    435    $   (34)  $ (12,745)     $ (1,403)  $    495   $    279   $  1,816

Interest expense.....................       248        310        317         351             5         46         89        229
Other expense (income)...............         4         47         66          57             5          4         29         13
                                       ---------  ---------  ---------  ----------    ----------  --------  ---------  ---------

Income (loss) before income taxes ...  $ (2,815)  $     78    $  (417)  $ (13,153)     $ (1,413)  $    445   $    161   $  1,574
Income tax provision (benefit).......    (1,224)        33         92      (4,088)         (565)       178         64        694
                                       ---------  ---------  ---------  ----------    ----------  --------  ---------  ---------
Net income (loss)....................    (1,591)        45       (509)     (9,065)         (848)       267         97        880
                                       =========  =========  =========  ==========    ==========  ========  =========  =========
Earnings (loss) per share:
     Basic...........................  $  (0.23)  $   0.01    $ (0.07)  $   (1.31)     $  (0.12)  $   0.04   $   0.01   $   0.13
                                       =========  =========  =========  ==========    ==========  ========  =========  =========
     Diluted.........................  $  (0.23)  $   0.01    $ (0.07)  $   (1.31)     $  (0.12)  $   0.04   $   0.01   $   0.12
                                       =========  =========  =========  ==========    ==========  ========  =========  =========
Weighted average shares outstanding:
     Basic...........................     6,864      6,866      6,889       6,903        6,842       6,843      6,851      6,852
                                       =========  =========  =========  ==========    ==========  ========  =========  =========
     Diluted.........................     6,864      7,091      6,889       6,903        6,842       7,256      7,070      7,074
                                       =========  =========  =========  ==========    ==========  ========  =========  =========
</TABLE>


<TABLE>
<CAPTION>
                                                                        As a percentage of net sales
<S>                                     <C>       <C>        <C>        <C>            <C>        <C>        <C>        <C>
Net sales............................     100.0%     100.0%     100.0%      100.0%       100.0%      100.0%     100.0%     100.0%
Cost of sales........................      54.1       51.4       53.6        65.2         53.2        51.0       54.3       55.3
                                         --------   --------   --------    --------    ----------   --------  --------   --------

Gross profit.........................      45.9       48.6       46.4        34.8         46.8        49.0       45.7       44.7
Selling and marketing expenses.......      46.6       39.0       39.5        37.2         43.6        38.2       37.0       33.1
                                         --------   --------   --------    --------    ----------   --------  --------   --------

Store contribution(1)................      (0.7)       9.6        6.9        (2.4)         3.2        10.8        8.7       11.6
Administrative and distribution
     expenses........................      10.3        8.1        7.0         8.8         10.6         8.6        7.6        5.7
Restructuring and impairment.........       0.0        0.0        0.0        26.9          0.0         0.0        0.0        0.4
                                        ---------   --------   --------    --------    ----------   --------  --------   --------

Operating income (loss)..............     (11.0)       1.5       (0.1)      (38.1)        (7.4)        2.2        1.1        5.5
Interest expense.....................       1.1        1.1        1.1         1.0          0.1         0.2        0.4        0.7
Other expense (income)...............       0.0        0.1        0.2         0.2          0.0         0.0        0.1        0.0
                                         --------   --------   --------    --------    ----------   --------  --------   --------

Income (loss) before income taxes....     (12.1)       0.3       (1.4)      (39.3)        (7.5)        2.0        0.6        4.8
Income tax provision (benefit).......      (5.3)       0.1        0.3       (12.2)        (3.0)        0.8        0.2        2.1

Net income (loss)....................      (6.8)%      0.2%      (1.7)%     (27.1)%       (4.5)%       1.2%       0.4%       2.7%
                                         ========   ========   ========    ========    ==========   ========  ========   ========
</TABLE>


(1)  Store contribution refers to gross profit after deducting selling and
     marketing expenses. Store contribution is presented to provide additional
     information about the Company and is commonly used as a performance
     measurement by retail companies. Store contribution should not be
     considered in isolation or as a substitute for operating income, cash flow
     from operating activities and other income or cash flow data prepared in
     accordance with generally accepted accounting principles, or as a measure
     of the Company's profitability or liquidity.

     The Company anticipates that operating results will fluctuate as a result
of a number of factors, including seasonality, weather, changes in pricing or
promotion policies by the Company, its competitors or its suppliers, the
availability and cost of merchandise, consumer acceptance of the products sold
by the Company, and the number and timing of store openings and closures. The
availability and cost of merchandise may, in turn, fluctuate due to a number
of factors including changes in the Company's relationships with major
suppliers, the Company's access to private label



                                      21
<PAGE>

manufacturing capacity, foreign currency fluctuations and other risks
associated with importing private label products from foreign countries.

LIQUIDITY AND CAPITAL RESOURCES

          The Company has financed its operations from internally generated
cash flow, borrowings under its revolving line of credit, and equity
financing. The Company's liquidity requirements relate primarily to the
financing of inventories, build-out of new stores, remodeling of existing
stores and the implementation of its restructuring plan. In fiscal 1998, the
Company also used funds for the acquisition of Eagles Nest and the relocation
of its distribution facility from El Dorado Hills, California to West
Sacramento, California. In connection with the acquisition of Eagles Nest,
the Company paid off the Eagles Nest line of credit and other debt of
approximately $1.4 million.

          Net cash provided by operating activities for fiscal 1999 was
$645,000. Net cash used for operating activities for fiscal 1998 and 1997
was, $3.3 million, and $1.3 million , respectively. Net cash used
for/provided by operating activities has historically been driven by net
income (loss) levels combined with fluctuations in inventory and accounts
payable resulting from growth. Inventories at the end of fiscal 1999 were
$34.1 million compared to $37.0 million at the end of fiscal 1998, a decrease
of $2.9 million. The decrease in inventory is primarily due to the $3.8
million writedown of inventory in the 42 stores scheduled for closure, offset
by an increase in inventory related to the opening of seven stores (net of
closures) during fiscal 1999. The Company's average store inventories vary
throughout the year and increase in advance of the peak selling periods of
back-to-school and Christmas.

          The Company had $7.1 million in working capital at the end of
fiscal 1999 compared to $25.1 million at the end of fiscal 1998, a decrease
of $18.0 million. The decrease in working capital is primarily attributable
to the October 1999 amendment to the revolving line of credit agreement
whereby the Company forfeited its right to convert up to $10.0 million of the
line of credit to term debt amortizing over a five year period. The Company's
working capital needs are somewhat seasonal and typically peak in the second
and fourth quarters. The peak in the second quarter is due to the incurrence
of operating losses in the first quarter and increased inventory purchased
for the Spring selling season. Working capital needs peak in the fourth
quarter due to increases in inventory in advance of the holiday selling
season, and payments coming due for back-to-school merchandise. In addition,
the Company requires incremental working capital to stock each new store upon
opening. Seasonally strong holiday sales at the end of the fourth quarter,
and relatively low first quarter inventory levels, typically reduce working
capital needs in the first quarter.

          Capital expenditures excluding the cost of acquisitions were $2.8
million, $6.4 million and $2.3 million in fiscal 1999, 1998, and 1997,
respectively. Capital expenditures for fiscal 1999 were primarily for the
build-out of 18 new stores, the build-out of two stores opened in 1998, the
remodeling of two stores, software and hardware upgrades, and furniture and
fixtures for the Company's new distribution center.

          During fiscal 2000, the Company plans to open approximately four
new stores and remodel eight existing stores. The Company estimates that
total capital expenditures in fiscal 2000 will be approximately $1.5 million.

          The Company reviews the operating performance of its stores on an
ongoing basis to determine which stores, if any, to close. The Company closed
seven stores in the first quarter of 1999 and closed four additional stores
in the third quarter. The Company anticipates closing 43 stores in fiscal
2000, 42 stores as part of the restructuring plan and one store currently in
a temporary location.

          Financing activities provided cash of $3.4 million, $10.5 million
and $5.0 million in fiscal 1999, 1998 and 1997, respectively. Net cash
provided by financing activities in fiscal 1999 was primarily attributable to
additional borrowings under the Company's revolving line of credit to fund
working capital requirements, costs associated with the restructure and the
severance and related costs associated with the changes in management. Net
cash provided in fiscal 1998 was primarily attributable to additional
borrowings under the Company's revolving line of credit to fund working
capital requirements and the acquisition of Eagles Nest. Cash was also used
from financing activities for the early retirement of long-term debt. In
fiscal 1997 the Company consummated its initial public offering which
generated $25 million in net proceeds. The proceeds were utilized to repay
all indebtedness then outstanding under the Company's


                                       22
<PAGE>

revolving credit facility ($10.2 million) and other debt totaling $7.5
million, and to make a $6.4 million distribution to the Pre-Offering
Stockholders.

          In October 1999 the Company obtained an amendment ("Amendment") to
its revolving line of credit ("Revolving Line"). The Amendment increased the
Revolving Line to $25.0 million, including up to $1.5 million in letters of
credit and limited borrowings and letters of credit to a percentage of
eligible inventory. The amended Revolving Line is due October 2, 2000. The
terms of the Amendment terminated the Company's previous right to convert up
to $10.0 million of the Revolving Line to term debt amortizing over a five
year period.

          The Company's Revolving Line bears interest at the option of the
Company at either the bank's reference rate or the London Inter-Bank Offered
Rate plus 2%, and is collateralized by all of the Company's assets. The
Revolving Line requires the Company to meet certain financial covenatnts
including minimum earnings before income taxes, depreciation and amortization
(EDITDA), and limits on dividends and acquistions of capital assets. Such
covenants were amended as part of the October 1999 Amendment. In January
2000, the Company obtained a waiver and amendment to the Revolving line to
bring the Company into compliance with such covenants. As of December 25,
1999, $15.5 million was outstanding under the Revloving Line.

          In March 2000, the Company obtained a firm commitment letter for a
60 month senior revolving credit facility ("New Revolver") with borrowing
availability up to $25 million, which will replace its Revolving Line. Upon
closing, the New Revolver will bear variable interest and will be
collateralized by all of the Company's assets. Borrowings under the New
Revolver will be limited to specified percentages of eligible inventory and
accounts receivable. The New Revolver will prohibit the Company from paying
dividends without the bank's consent and will limit the Company's capital
expenditures. In addition, the New Revolver will require the Company to meet
certain financial covenants, including minimum financial ratios and
profitability ratios. The Company expects to close its New Revolver agreement
in April 2000 and plans to use the proceeds from the Revolver to repay all
indebtedness under the Company's Revolving Line and to fund the Company's
working capital needs.

          Management believes that operating cash flow and borrowing under
its credit facility will be sufficient to complete the Company's fiscal 2000
planned store expansions and to satisfy the Company's other capital
requirements through fiscal 2000. The Company's capital requirements may vary
significantly from those anticipated depending upon such factors as operating
results, the number and timing of new store openings, and the number and size
of any future acquisitions.

          As part of its growth strategy, the Company may, when appropriate,
pursue opportunities to acquire complementary businesses. To the extent that
the foregoing cash resources are insufficient to fund the purchase price of
future acquisitions, if any, or the operations of any acquired business,
additional external capital may be required. There can be no assurance that
additional financing will be available on reasonable terms or at all.

IMPACT OF INFLATION

          Management does not believe that inflation has had a material
adverse effect on the Company's results of operations. However, the Company
cannot predict accurately the effect of inflation on future operating results.

YEAR 2000

          The Year 2000 problem concerns the inability of some computer
programs to recognize a year that begins with "20" instead of the familiar
"19". For computer programs that were written using two digits instead of
four to define the applicable year, they may recognize a date using "00" as
the year 1900 instead of the year 2000. Computer programs which are not Year
2000 compliant may fail or create erroneous results after December 31, 1999
(and in some cases before), causing disruptions of operations, including,
among other things, a temporary inability to process transactions or send and
receive electronic data to or from third parties or engage in similar normal
business activities.

          To address the Year 2000 issue, the Company developed a Year 2000
plan ("Y2K Plan") with the objective of having all of its information
technology ("IT") systems and non-IT systems functioning properly with
respect to the Year 2000 by December 31, 1999. The Company identified three
areas of focus for its Y2K Plan: corporate headquarters,


                                       23
<PAGE>

store sites and "key" third parties (the "Third Parties"). Third Parties
include suppliers, vendors and service providers that are deemed to be
critical to the Company's business operations. All phases of the Y2K Plan
were applied to these three areas.

          All phases of the Y2K Plan were completed as scheduled. To date,
the Company has not experienced any Year 2000 problems with respect to its
corporate headquarters, store sites, or Third Parties. In addition, the
Company has not experienced any loss in revenues due to the Year 2000 problem.

          As of December 25, 1999, the Company had spent a total of
approximately $60,000 in connection with addressing the Year 2000 problem and
does not anticipate any significant future costs. These costs were largely
due to repairing software problems and the replacement of problem systems and
equipment. The Company does not separately track the internal costs incurred
for the Y2K Plan. Such costs are principally related to the payroll of the
Company's Management Information Systems department. The Company's policy is
to expense maintenance and modification costs and capitalize hardware and
software purchases and upgrades. The Company funded the foregoing from
operating cash flow.

          Although unlikely, given that the Company has not experienced any
Year 2000 problems to date, there can be no certainty that any future
unforeseen Year 2000 problem will not adversely affect the Company's results
of operations, liquidity or financial position or adversely affect the
Company's relationships with customers, suppliers, vendors or others.

ITEM 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          The market risk inherent in the Company's market risk sensitivity
instruments is the potential loss arising from adverse changes in interest
rates and foreign currency exchange rates. All financial instruments held by
the Company and described below are held for purposes other than trading.

          INTEREST RATE RISK

          The Company's revolving line of credit exposes earnings to changes
in short-term interest rates since the interest rates on the revolving line
of credit are variable. If the variable rates on the Company's revolving line
of credit were to increase by 1% from the rate at December 25, 1999 and the
Company borrowed the maximum amount available under its revolving line of
credit ($25.0 million) for all of fiscal 2000, the Company's interest expense
would increase, soley as a result of the increase in interest rates,
resulting in a $150,000 decrease in net income. The marginal income tax rate
of 40.0% was used in this analysis. This analysis does not consider the
effects of the reduced level of overall economic activity that could exist in
such an environment. Further, in the event of a change of such magnitude,
management would likely take actions to further mitigate its exposure to the
change. The fair value of the Company's revolving line of credit is not
believed to be materially affected by changes in market interest rates.

          FOREIGN EXCHANGE RISK

          The Company typically does not hedge its foreign currency exposure.
Management does not believe its exposure to foreign currency rate
fluctuations to be material.


                                     24
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                                                               Page
<S>                                                                                                        <C>
Report of independent accountants.                                                                             26

Consolidated balance sheets as of December 25, 1999 and December 26, 1998.                                     27

Consolidated statements of operations for each of the three fiscal years in the period ended
December 25, 1999.                                                                                             28

Consolidated statements of changes in stockholders' equity for each of the three fiscal years
in the period ended December 25, 1999.                                                                         29

Consolidated statements of cash flows for each of the three fiscal years in the period ended
December 25, 1999.                                                                                             30

Notes to financial statements.                                                                                 31
</TABLE>


                                         25

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Track 'n Trail and Subsidiaries
El Dorado Hills, California


In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of Track
'n Trail and its subsidiaries at December 25, 1999 and December 26, 1998, and
the results of their operations and their cash flows for each of the three
fiscal years in the period ended December 25, 1999 in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

/s/PricewaterhouseCoopers LLP


Sacramento, California
February 11, 2000, except for the last paragraph of Note 5,
as to which the date is March 21, 2000


                                      26
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                           DECEMBER 25,         DECEMBER 26,
                                                               1999                 1998
<S>                                                        <C>                  <C>
ASSETS
Current assets:
    Cash and cash equivalents                                $  3,069              $  1,808
    Accounts receivable                                         1,898                 2,510
    Income taxes receivable                                     1,710                   130
    Inventories                                                34,099                36,998
    Prepaid expenses                                              662                   432
    Deferred income taxes                                       2,831                   675
                                                       --------------       ---------------
             Total current assets                              44,269                42,553

Fixed assets, net                                               9,513                11,849
Goodwill, net                                                   2,757                 4,852
Deferred income taxes                                           3,646                 2,025
                                                        -------------        --------------
             Total assets                                   $  60,185             $  61,279
                                                        =============        ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Current portion of long-term debt                       $  15,534              $  1,746
    Accounts payable                                           13,772                12,481
    Reserve for store closings and restructuring costs          4,782                     -
    Accrued payroll                                             1,008                   561
    Sales tax payable                                             945                   952
    Income taxes payable                                            -                   687
    Accrued expenses and other liabilities                      1,106                 1,010
                                                      ---------------      ----------------
             Total current liabilities                         37,147                17,437

Deferred rent                                                   1,483                 1,540
Long-term debt, net of current portion                              5                 9,764
                                                       --------------       ---------------
             Total liabilities                                 38,635                28,741
                                                       --------------       ---------------

Commitments and contingencies (Notes 5, 7 and 13)

Stockholders' equity:
    Preferred stock, $0.01 par value; 2,000,000 shares
      authorized; no shares issued or outstanding                   -                     -
    Common stock, $0.01 par value; 20,000,000 shares
      authorized; 6,959,476 and 6,851,961 shares issued
      and outstanding at December 25, 1999 and
      December 26, 1998, respectively                              70                    69
    Additional paid-in capital                                 25,962                25,831
    Retained earnings (deficit)                                (4,482)                6,638
                                                        ---------------      ----------------
             Total stockholders' equity                        21,550                32,538
                                                        ---------------      ----------------
             Total liabilities and stockholders' equity     $  60,185             $  61,279
                                                        ===============      ================
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                      27
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                 FISCAL YEAR ENDED
                                           ----------------------------------------------------------
                                              DECEMBER 25,         DECEMBER 26,          DECEMBER 27,
                                                 1999                  1998                 1997
<S>                                        <C>                     <C>                   <C>
Net sales                                     $ 114,758             $  99,851            $  91,834
Cost of sales                                    64,896                53,615               47,677
                                              ---------             ---------            ---------
           Gross profit                          49,862                46,236               44,157
                                              ---------             ---------            ---------

Operating expenses:
    Selling and marketing                        46,034                37,186               30,780
    Administrative and distribution               9,741                 7,741                6,840
    Restructuring and impairment                  8,994                   122                    -
                                              ---------             ---------            ---------
           Total operating expenses              64,769                45,049               37,620
                                              ---------             ---------            ---------

           Operating income (loss)              (14,907)                1,187                6,537

Other (income) expenses:

    Interest expense                              1,226                   369                1,260
    Other, net                                      174                    51                  (21)
                                              ---------             ---------            ---------
           Income (loss) before income taxes    (16,307)                  767                5,298

Income tax provision (benefit)                   (5,187)                  371                  118
                                              ---------             ---------            ---------
           Net income (loss)                  $ (11,120)            $     396            $   5,180
                                              =========             =========            =========

Historical earnings (loss) per share:
    Basic                                     $   (1.62)            $    0.06            $    1.10
                                              =========             =========            =========
    Diluted                                   $   (1.62)            $    0.06            $    1.03
                                              =========             =========            =========

Pro forma income data (unaudited):
    Historical income before income
      taxes                                                                              $   5,298
    Pro forma income tax provision                                                           2,119
                                                                                         ---------
           Pro forma net income                                                          $   3,179
                                                                                         =========
    Pro forma earnings per share:
      Basic                                                                              $    0.68
                                                                                         =========
      Diluted                                                                            $    0.58
                                                                                         =========
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                      28
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                       COMMON STOCK
                                               -----------------------------     PAID-IN           RETAINED
                                                  NUMBER         AMOUNT          CAPITAL      EARNINGS (DEFICIT)       TOTAL
<S>                                            <C>               <C>             <C>          <C>                      <C>
BALANCE, DECEMBER 28, 1996                        4,107,608         $    41        $    724           $     9,881      $  10,646

    Issuance of common stock upon
      initial public offering, net of
      offering costs of $3,649                    2,727,272              27          24,961                     -         24,988

    Issuance of common stock upon
      exercise of options                             4,931               -              20                     -             20

    Distributions to stockholders                         -               -               -                (8,819)        (8,819)

    Compensation recorded under stock
      option plans                                        -               -              67                     -             67

    Net income                                            -               -               -                 5,180          5,180
                                               -------------  --------------  -------------- --------------------- --------------
BALANCE, DECEMBER 27, 1997                        6,839,811              68          25,772                 6,242         32,082

    Issuance of common stock under the
     employee stock purchase plan                    12,150               1              59                     -             60

    Net income                                            -               -               -                   396            396
                                               -------------  --------------  -------------- --------------------- --------------

BALANCE, DECEMBER 26, 1998                        6,851,961              69          25,831                 6,638         32,538

    Issuance of common stock under the
     employee stock purchase plan                    39,515               -              61                     -             61

    Issuace of common stock upon                     68,000               1              70                     -             71
      exercise of options

    Net loss                                              -               -               -               (11,120)       (11,120)
                                               -------------  --------------  -------------- --------------------- --------------
BALANCE, DECEMBER 25, 1999                        6,959,476         $    70       $  25,962          $     (4,482)     $  21,550
                                               =============  ==============  ============== ===================== ==============
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                      29
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                      1999              1998              1997
<S>                                                                <C>                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                              $ (11,120)          $   396           $  5,180
    Adjustments to reconcile to cash provided by
     (used for) operating activities:
      Depreciation and amortization                                    2,683             2,119              1,743
      Loss on disposal of fixed assets                                    61
      Restructuring and impairment                                     8,994               122                  -
      Compensation recorded in connection
       with stock option plans                                             -                 -                 67
      Deferred income taxes                                           (3,777)             (408)            (1,161)
      Cash provided by (used for) changes in
       operating assets and liabilities, net of
       effects of business combinations:
        Accounts receivable                                              611              (961)              (530)
        Income taxes receivable                                       (1,579)             (130)                 -
        Inventories                                                    2,899            (7,946)            (7,984)
        Prepaid expenses                                                (230)             (104)               (99)
        Accounts payable and accrued liabilities                       2,552             3,916                831
        Income taxes payable                                            (687)             (402)               613
        Deferred rent                                                    238                64                 29
                                                              ---------------   ---------------   ----------------
           Cash provided by (used for)
            operating activities                                         645            (3,334)            (1,311)
                                                              ---------------   ---------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchases of fixed assets                                         (2,842)           (6,365)            (2,306)
    Proceeds from sale of fixed assets                                    22                 -                 27
    Cash paid for business combinations                                    -            (1,401)                 -
                                                              ---------------   ---------------   ----------------
           Cash used for investing activities                         (2,820)           (7,766)            (2,279)
                                                              ---------------   ---------------   ----------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Bank line of credit:
      Borrowings                                                       64,019            48,431             44,819
      Repayments                                                      (59,818)          (37,732)           (45,499)
    Other long-term debt:
      Repayments                                                         (171)             (960)           (10,513)
    Change in book overdraft                                             (726)              726                  -
    Net proceeds from issuance of common stock                             61                60             24,988
    Proceeds from exercise of stock options                                71                 -                 20
    Payment of distributions to stockholders                                -                 -             (8,819)
                                                               ---------------   ---------------   ----------------
        Cash provided by financing activities                           3,436            10,525              4,996
                                                               ---------------   ---------------   ----------------
        Increase (decrease) in cash and cash equivalents                1,261              (575)             1,406
Cash and cash equivalents, beginning of year                            1,808             2,383                977
                                                               ---------------   ---------------   ----------------
Cash and cash equivalents, end of year                               $  3,069          $  1,808           $  2,383
                                                               ===============   ===============   ================
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                      30
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.   SIGNIFICANT ACCOUNTING POLICIES

     BACKGROUND

     Track n' Trail, a Delaware corporation (Company), is a retailer of
     footwear, apparel and related accessories. As of December 25, 1999 and
     December 26, 1998, the Company operated 199 and 192 stores in 35 and 36
     states, respectively, under the Track `n Trail, Overland Trading and Eagles
     Nest names. Each Track `n Trail and Overland Trading store offers a wide
     range of rugged walking and fashion casual shoes, sandals and boots. Each
     Eagles Nest store offers premium outdoor apparel and footwear.

     The Company ends its fiscal year on the last Saturday in December. All
     fiscal years presented include fifty-two weeks.

     The Company is the successor to businesses formerly conducted by Track 'n
     Trail, a California corporation (Track 'n Trail-California), and its
     subsidiary, Overland Management Corporation (Overland). In connection with
     the formation of the Company, the Company issued an aggregate of 40,816
     shares of its common stock to existing stockholders of Track 'n
     Trail-California. A reorganization of Track 'n Trail-California (the
     Reorganization) was effected on October 7, 1997, in which the Track 'n
     Trail-California stockholders exchanged 100% of their Track 'n
     Trail-California common stock for 4,107,608 shares of the Company's common
     stock, inclusive of the 40,816 shares of the Company's common stock issued
     upon formation. The Reorganization, which was accounted for in a manner
     similar to a pooling-of-interests, was accomplished in an exchange of
     approximately 100 shares of the Company's common stock for each share of
     Track 'n Trail-California common stock. In connection with the
     Reorganization, all of the common stock of Overland was transferred to the
     Company in the form of a dividend resulting in the predecessor businesses
     being wholly owned subsidiaries of the Company. The accompanying financial
     statements reflect, for all periods presented prior to the Reorganization,
     the capital structure and number of shares outstanding resulting from the
     Reorganization. Accordingly, all references to the number of common and
     common equivalent shares and to per share information in the consolidated
     financial statements have been adjusted to reflect the capital structure
     resulting from the Reorganization on a retroactive basis for all periods
     presented.

     The Company operates in a single business segment of retailing. The Company
     acquires its merchandise from a number of manufacturers; however, during
     the fiscal years ended December 25, 1999 and December 26, 1998, 42.6% and
     44.8%, respectively, of the Company's net sales were related to merchandise
     purchased from three manufacturers.

     INITIAL PUBLIC OFFERING
     On October 16, 1997, the Company completed its initial public offering
     (Offering) of its common stock. In connection with the Offering, the
     Company issued 2,727,272 shares of common stock and received net proceeds
     of $24,988,000, net of underwriting discounts and offering expenses. Upon
     closing of the Offering, the Company's nonqualified and incentive stock
     options vested, resulting in a non-cash compensation charge reducing net
     income by $33,000, after the related income tax effect of $22,000.

     Certain notes payable, which had an aggregate balance of approximately
     $17.7 million at the date of the Offering became due and payable upon
     closing of the Offering. The Company used a portion of its proceeds of the
     Offering to retire these obligations.


                                      31
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     During 1997, Track 'n Trail-California declared distributions to its
     stockholders of substantially all previously undistributed accumulated S
     corporation earnings remaining at the date of the Reorganization. Of such
     distributions, $6,400,000 were paid from a portion of the Company's
     proceeds from the Offering.

     PRINCIPLES OF CONSOLIDATION
     The financial statements include the consolidated accounts of the Company
     and its three subsidiaries, Track 'n Trail-California, Overland and Nevin's
     Eagles Nest, Inc. (Eagles Nest). Overland became a 79.0% owned subsidiary
     on October 25, 1996, and a wholly owned subsidiary effective January 1,
     1997, and Eagles Nest became a wholly owned subsidiary on August 26, 1998.
     All intercompany transactions and balances have been eliminated in
     consolidation.

     CASH AND CASH EQUIVALENTS
     Cash and cash equivalents include cash balances and all highly liquid
     investments with an original maturity of three months or less. Cash
     deposits periodically exceed the Federal Deposit Insurance Corporation
     insured limit of $100,000 for each account.

     In the ordinary course of business the Company periodically has outstanding
     checks in excess of its bank balance (book overdraft). The Company had a
     book overdraft $726,000 at December 26, 1998, which was included in
     accounts payable.

     INVENTORIES
     Inventories are stated at lower of cost (retail method) or market.

     FIXED ASSETS
     Fixed assets are stated at cost and depreciated on the straight-line method
     over the assets' estimated useful lives ranging from three to ten years;
     the cost of leasehold improvements are amortized over the shorter of the
     lease term or useful life of the related assets. When assets are retired or
     otherwise disposed of, the cost and related accumulated depreciation are
     removed from the accounts and any resulting gain or loss is reflected in
     income for the period. The cost of maintenance and repairs is charged to
     income as incurred; significant renewals and betterments are capitalized.

     STORE PRE-OPENING COSTS
     Costs of a noncapital nature incurred prior to store openings are expensed
     as incurred.

     GOODWILL
     Goodwill represents the excess of the purchase price over the fair value of
     the net assets of acquired companies and is being amortized using the
     straight-line method over 20 years. Accumulated amortization of goodwill at
     December 25, 1999, amounted to $526,000.

     The Company assesses goodwill for recoverability along with its assessment
     of store assets for recoverability based on undiscounted cash flow and
     operating income for each subsidiary having a material goodwill balance. In
     the event that estimated future undiscounted cash flows of the stores in a
     subsidiary acquired in a business combination that gave rise to goodwill is
     less than the carrying amount of those stores and any related goodwill,
     reductions are made of goodwill and then of the store assets such that the
     carrying amount does not exceed the fair value of the stores.


                                      32
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     INCOME TAXES
     The Company accounts for income taxes using the liability method. The
     estimated future tax effect of differences between the basis in assets and
     liabilities for tax and accounting purposes is accounted for as deferred
     taxes. A valuation allowance is established to reduce deferred tax assets
     when management estimates that it is more likely than not that all, or some
     portion, of such deferred tax assets would not be realized.

     Commencing June 28, 1992, and until the Reorganization on October 7, 1997,
     Track 'n Trail-California had elected S corporation status for federal
     income taxes and most state income taxes while Overland operated as a C
     corporation for federal and state income tax purposes. Under S corporation
     status, Track 'n Trail-California's income, other than that of Overland,
     was taxable to its stockholders personally, with only minimal state income
     taxes charged to Track 'n Trail-California.

     Upon completion of the Reorganization in October 1997, Track 'n
     Trail-California converted from an S corporation to a C corporation under
     provisions of the Internal Revenue Code and state statutes and,
     accordingly, became subject to federal and state income tax on all of its
     income. Upon termination of the S corporation election, deferred income
     taxes of $1,324,000, representing the net tax effect of differences between
     Track 'n Trail-California's financial statement and tax bases in certain
     assets and liabilities, became a net asset and was included in the
     consolidated balance sheet with a corresponding non-recurring decrease in
     tax expense in the consolidated statement of operations as of the date of
     the Reorganization. Such deferred tax assets relate primarily to
     differences in the financial statement and tax bases of fixed assets and
     inventory and the effect of rent and stock compensation plan deductions for
     accounting, but not tax, purposes.

     Pro forma net income (unaudited) for 1997 has been computed to include a
     provision for income taxes at an effective tax rate of 40.0% representing
     management's estimate of the effective tax rate as if the Reorganization
     had been in effect and Track 'n Trail-California had been a C corporation
     for all periods presented.

     STOCK OPTIONS
     As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the
     Company has elected to measure and record compensation costs relative to
     employee stock option and purchase plans in accordance with the provisions
     of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
     Issued to Employees, and make pro forma disclosure of net income and
     earnings per share as if the fair value based method of valuing stock
     options had been applied.

     RENT EXPENSE
     Rent expense is recognized on a straight-line basis over the respective
     lease term. Rents accrued but not contractually due are reported as
     deferred rent. Contingent rental expense, based on store sales, is
     recognized when incurred.

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


                                      33
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     RECLASSIFICATIONS
     Certain reclassifications were made to 1998 year amounts to conform with
     the 1999 presentation.

2.   EARNINGS (LOSS) PER SHARE

     A reconciliation of the numerators and denominators used in the computation
     of basic and diluted earnings per share is as follows (in thousands, except
     per share information):

<TABLE>
<CAPTION>

                                                      HISTORICAL EARNINGS PER SHARE
                                          ----------------------------------------------------
                                               1999               1998             1997
<S>                                       <C>              <C>               <C>
Income (loss) available to common
 stockholders for basic and diluted
 earnings (loss) per share                $      (11,120)   $           396   $         5,180
                                          ===============   ================  ================
Weighted average shares for basic
 earnings (loss) per share                         6,881              6,847             4,700
Dilutive effect of stock options
 (treasury stock method)                               -                307               327
                                          ---------------   ----------------  ----------------
Weighted average shares for
 diluted earnings (loss) per share                 6,881              7,154             5,027
                                          ===============   ================  ================
Historical earnings (loss) per share:
    Basic                                 $        (1.62)   $          0.06   $          1.10
                                          ===============   ================  ================
    Diluted                               $        (1.62)   $          0.06   $          1.03
                                          ===============   ================  ================
</TABLE>


                                      34
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                 PRO FORMA
                                                                                  EARNINGS
                                                                                 PER SHARE
                                                                                (UNAUDITED)
                                                                                    1997
<S>                                                                           <C>
Income available to common stockholders
 (pro forma net income) for basic and
diluted earnings per share                                                     $        3,179
                                                                               ===============
Weighted average shares for
 basic earnings per share                                                               4,700
Dilutive effect of stock options
 (treasury stock method)                                                                  327
Distribution shares                                                                       421
                                                                               ---------------
Weighted average shares for diluted
 earnings per share                                                                     5,448
                                                                               ===============
Pro forma earnings per share:
    Basic                                                                      $         0.68
                                                                               ===============
    Diluted                                                                    $         0.58
                                                                               ===============
</TABLE>


     All warrants and options for fiscal 1999 and all warrants outstanding and
     certain options with exercise prices in excess of market value for fiscal
     1998 and 1997, were not dilutive and, accordingly, were not included in the
     weighted average number of common and common equivalent shares outstanding.

     In applying the treasury stock method for determining the dilution
     applicable to stock options outstanding, the incremental shares assumed
     issued (excess of shares assumed issued over the number of shares assumed
     purchased) were determined using the sum of exercise proceeds, future
     compensation and tax benefit to the Company upon exercise of the options as
     the assumed proceeds that would have been used to purchase shares at the
     average value during the period. Average market value was based on
     estimated fair values for periods prior to the Offering and market prices
     thereafter.

     Distribution shares included in weighted average common shares outstanding
     used to compute pro forma diluted earnings per share (unaudited) for fiscal
     1997 represents the weighted number of shares of common stock sold in the
     Offering, the net proceeds of which were necessary to pay the excess of S
     corporation distributions paid or declared during the twelve month period
     preceding the Offering over earnings during the twelve month period
     preceding the Offering.


                                      35
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

3.   FIXED ASSETS

     Fixed assets consist of (in thousands):

<TABLE>
<CAPTION>

                                                                    DECEMBER 25,        DECEMBER 26,
                                                                        1999                1998
<S>                                                                <C>                 <C>
Leasehold improvements                                             $       10,241      $       11,814
Furniture, fixtures and equipment                                           5,529               5,736
                                                                   ---------------     ---------------
                                                                           15,770              17,550
Less accumulated depreciation                                              (6,257)             (5,701)
                                                                   ---------------     ---------------
Fixed assets, net                                                  $        9,513      $       11,849
                                                                   ===============     ===============
</TABLE>

     Depreciation expense for fiscal years 1999, 1998 and 1997 was $2,421,000,
     $1,922,000 and $1,579,000, respectively.

4.   RESTRUCTURING AND ASSET IMPAIRMENT CHARGES

     During fiscal 1999, declining operating results of certain of the Company's
     stores led to the adoption of a restructuring plan. Under the restructuring
     plan, the Company intends to close 42 stores during the first 120 days of
     fiscal 2000 consisting of 31 Track `n Trail stores, four Overland Trading
     stores and all seven Eagles Nest stores along with a regional office in
     Colorado. The decision to close the stores and regional office was based on
     store performance combined with market economic and projected future cash
     flows. During fiscal 1999, in connection with the restructuring plan, the
     Company recorded charges to operations for restructuring costs, asset
     impairments and inventory reserves of $12,773,000. The charge included
     $8,994,000 of restructuring costs and asset impairments, including:

<TABLE>

<S>                                                                                     <C>

Write-down of leasehold improvements in stores to be closed                                  $2,674,000
Impairment of goodwill                                                                        1,833,000
Accrual of lease termination and other related costs                                          4,405,000
Employee severance                                                                               82,000
                                                                                            -----------
      Total                                                                                  $8,994,000
                                                                                            ===========
</TABLE>

     A total of 12 administrative employees received severance payments.
     Additionally, the Company recorded charges of $3,779,000 in cost of sales
     to reduce inventory to its net realizable value in the stores scheduled for
     closure.

     The Company commenced the restructure in late December 1999 and expects to
     substantially complete the plan in the second quarter of fiscal 2000. For
     fiscal 1999, 1998 and 1997, the net sales


                                      36
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     of the closing stores were $19,849,000, $13,409,000 and $8,438,000,
     respectively. Store operating results (net sales less cost of sales and
     store operating costs) for Track `n Trail and Overland Trading Company
     closing stores, and pre-tax income (loss) for the Eagles Nest stores,
     before restructuring and impairment and inventory writedowns, were
     ($3,589,000), ($475,000) and $451,000 for fiscal 1999, 1998 and 1997,
     respectively. Accruals for restructuring costs and asset impairments
     were made in December 1999 when the restructuring plan was approved by
     the Company's Board of Directors.

     A reconciliation of the restructuring reserve and asset impairment charges
     follows (in thousands):

<TABLE>
<CAPTION>

                                             LEASE
                                          TERMINATION
                                           AND OTHER         LEASEHOLD                        EMPLOYEE
                                          RELATED COSTS      IMPROVEMENTS      GOODWILL      SEVERANCE        TOTAL
<S>                                     <C>               <C>                <C>            <C>            <C>
Charges in fiscal 1999 for
 restructuring and impairments          $          4,405  $         2,674    $      1,833   $         82   $      8,994
Asset impairments recorded
 in fiscal 1999                                        -           (2,674)         (1,833)             -         (4,507)
Reversal of accrual to recognize
 rents on a straight-line basis                      295                -               -              -            295
                                        ----------------- ----------------   -------------  -------------  -------------
Reserve balance,
 December 25, 1999                      $          4,700  $             -    $          -   $         82   $      4,782
                                        ================= ================   =============  =============  =============
</TABLE>

     In addition to the restructure and asset impairment charges, during fiscal
     1999 the Company incurred $493,000 in severance and related expenses in
     connection with management changes.


                                      37
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

5.   LONG-TERM DEBT

     Long-term debt consists of (in thousands):

<TABLE>
<CAPTION>

                                                                              DECEMBER 25,         DECEMBER 26,
                                                                                  1999                 1998
<S>                                                                          <C>                  <C>
       Revolving line of credit, due 2000                                    $        15,500      $       11,299
       Promissory note, interest at 9.36%, collateralized
           by leasehold improvements, due 2000                                            30                  99
       Payable to sellers of Eagles
           Nest, repaid in 1999                                                            -                 100
       Capital lease, final payment due 2002                                               9                  12
                                                                            ----------------     ---------------
                  Total                                                               15,539              11,510
       Less current portion                                                          (15,534)             (1,746)
                                                                            ----------------     ---------------
       Long-term portion                                                     $             5      $        9,764
                                                                            ================     ===============
</TABLE>

     In October 1999, the Company obtained an amendment (Amendment) to its
     revolving line of credit (Revolving Line). The Amendment increased the
     Revolving Line to $25.0 million, including up to $1.5 million in letters of
     credit (of which $189,000 were issued and outstanding at December 25,
     1999), and limited borrowings and letters of credit to a percentage of
     eligible inventory. The amended Revolving Line is due October 2, 2000. The
     terms of the Amendment terminated the Company's previous right to convert
     up to $10.0 million of the Revolving Line to term debt amortizing over a
     five year period.

     Available additional borrowings under the Revolving Line were approximately
     $1.5 and $6.9 million at December 25, 1999 and December 26, 1998,
     respectively. Borrowings under the Revolving Line are collateralized by
     substantially all of the Company's assets.

     The Revolving Line bears interest, at the option of the Company, at either
     the bank's reference rate (8.50% at December 25, 1999) or LIBOR (6.49% at
     December 25, 1999), plus 2.0%, payable monthly, plus an annual commitment
     fee of $46,875. The weighted average interest rates for fiscal years 1999
     and 1998, were 8.01% and 7.99%, respectively.

     The Revolving Line requires the Company to meet certain financial covenants
     including minimum earnings before income taxes, depreciation and
     amortization (EBITDA), and limits on dividends and acquisitions of capital
     assets. Such covenants were amended as part of the October 1999 Amendment.

     At December 25, 1999, the Company was not in compliance with certain debt
     covenants. In January 2000, the Company obtained a waiver and amendment to
     the Revolving line to bring the Company into compliance with such
     covenants.


                                      38
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Scheduled maturities of long-term debt at December 25, 1999, are as follows
     (in thousands):

<TABLE>

<S>                                                   <C>
        2000                                          $        15,534
        2001                                                        4
        2002                                                        1
                                                      ----------------
              Total                                   $        15,539
                                                      ================
</TABLE>

     In March 2000, the Company obtained a firm commitment letter for a 60 month
     senior revolving credit facility ("New Revolver") with borrowing
     availability up to $25 million. Upon closing, the New Revolver will bear
     variable interest and will be collateralized by all of the Company's
     assets. Borrowings under the New Revolver will be limited to specified
     percentages of eligible inventory and accounts receivable. The New Revolver
     will prohibit the Company from paying dividends without the bank's consent
     and will limit the Company's capital expenditures. In addition, the New
     Revolver will require the Company to meet certain financial covenants,
     including minimum financial ratios and profitability ratios. The Company
     expects to close its New Revolver agreement in April 2000 and plans to use
     the proceeds to repay all indebtedness under the Company's Revolving Line
     and to fund the Company's working capital needs.

6.   STOCK OPTION AND PURCHASE PLANS

     STOCK OPTION PLAN
     In June 1996, Track 'n Trail-California stockholders approved the adoption
     of the 1996 Stock Option Plan (Plan). Effective upon the Reorganization,
     the Company assumed the Plan and, effective as of the date of the Offering,
     amended and restated the Plan. Upon the Reorganization, options to purchase
     shares of the Company's common stock were exchanged for all stock options
     then outstanding pursuant to the Plan to purchase shares of the common
     stock of Track 'n Trail-California. The terms and conditions of the options
     exchanged were equivalent. A total of 1,055,735 shares of common stock are
     reserved for issuance under the Plan.

     The Plan provides for the granting of nonstatutory stock options (NSOs) to
     employees, directors, consultants and advisors of the Company. The Plan
     also provides for the granting of incentive stock options (ISOs) to
     employees. The Plan provides for formula grants to non-employee directors
     of the Company (Outside Directors). Each such Outside Director
     automatically received NSOs to purchase 5,000 shares of common stock upon
     their initial appointment as an Outside Director and, upon each annual
     meeting of stockholders after their initial appointment, is entitled to
     receive NSOs to purchase 1,250 shares (unless the Outside Director was
     appointed prior to such a meeting, in which case the annual grant will
     occur at the second annual meeting following the initial appointment). The
     Plan provides that the option exercise price for ISOs and Outside Director
     options must be at least equal to 100% of the fair market value of the
     common stock on the date of grant. Options will have exercise and vesting
     terms as determined at the date of the grant by a compensation committee of
     the Company's board of directors; however, the options must have exercise
     and vesting terms of no more than ten years from the date of grant.


                                      39
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     The following is a summary of the activity in stock options granted during
     the fiscal years ended December 25, 1999, December 26, 1998 and December
     27, 1997:

<TABLE>
<CAPTION>

                                                                       INCENTIVE STOCK                  NONQUALIFIED STOCK
                                                                           OPTIONS                           OPTIONS
                                                               -------------------------------   --------------------------------
                                                                                   WEIGHTED                           WEIGHTED
                                                                                   AVERAGE                            AVERAGE
                                                                                   EXERCISE                           EXERCISE
                                                                   SHARES            PRICE            SHARES            PRICE
<S>                                                            <C>              <C>              <C>               <C>
        Outstanding as of December 28, 1996                           501,168    $        4.00           350,618    $        0.01
            Granted                                                         -                -            10,000             9.75
            Forfeited                                                 (20,127)            4.00                 -                -
            Exercised                                                  (4,931)            4.00                 -                -
                                                               --------------   --------------   ---------------   --------------

        Outstanding as of December 27, 1997                           476,110             4.00           360,618             0.28
            Granted                                                    40,000             9.75                 -                -
                                                               --------------   --------------   ---------------   --------------
        Outstanding as of December 26, 1998                           516,110             4.45           360,618             0.28
            Granted                                                    20,000             5.00             2,500             5.00
            Forfeited                                                 (60,000)            8.17                 -                -
            Exercised                                                       -                -           (68,000)            0.01
                                                               --------------   --------------   ---------------   --------------
        Outstanding as of December 25, 1999                           476,110    $        4.00           295,118    $        0.38
                                                               ==============   ==============   ===============   ==============
        Options exercisable as of December 25, 1999                   476,110    $        4.00           287,618    $        0.18
                                                               ==============   ==============   ===============   ==============
        Options exercisable as of December 26, 1998                   476,110    $        4.00           353,118    $        0.08
                                                               ==============   ==============   ===============   ==============
        Options exercisable as of December 27, 1997                   476,110    $        4.00           350,618    $        0.01
                                                               ==============   ==============   ===============   ==============
</TABLE>

     The weighted average remaining contractual life of all options outstanding
     at December 25, 1999, was:

<TABLE>
<CAPTION>

                INCENTIVE STOCK                                   NONQUALIFIED STOCK
                    OPTIONS                                             OPTIONS
       -----------------------------------                 ----------------------------------
                              WEIGHTED                                           WEIGHTED
                               AVERAGE                                            AVERAGE
                              REMAINING                                          REMAINING
                             CONTRACTUAL                                        CONTRACTUAL
           EXERCISE             LIFE                            EXERCISE            LIFE
            PRICE            (IN YEARS)                           PRICE          (IN YEARS)
<S>       <C>                   <C>                         <C>                      <C>
          $        4.00         5.2                         $         0.01           2.5

                                                            $         9.75           7.8

                                                            $         5.00           9.4
</TABLE>

     Compensation expense recognized for stock compensation awards, including
     stock appreciation rights, amounted to $0, $0 and $67,000 during the 1999,
     1998 and 1997 fiscal years, respectively.


                                      40
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     EMPLOYEE STOCK PURCHASE PLAN
     In April 1997, the Company adopted the Employee Stock Purchase Plan
     (Purchase Plan) effective as of the closing of the Offering. The Purchase
     Plan covers an aggregate of 150,000 shares of common stock and is intended
     to qualify as an employee stock purchase plan within the meaning of Section
     423 of the Internal Revenue Code. The plan administrator, appointed by the
     Company's board of directors, may authorize participation by eligible
     employees, including officers, in periodic Purchase Plan offerings. Under
     its terms, the board of directors may amend, modify or terminate the
     Purchase Plan at any time without notice.

     Substantially all full-time (as defined) employees with at least one year
     service prior to the commencement of the participation period are eligible
     to participate in the Purchase Plan; however, any highly compensated
     employee (as defined) who owns 3.0% or more of the outstanding stock in the
     Company may not participate in the Purchase Plan. Employees who participate
     in a Purchase Plan offering may have a percentage of their earnings (as
     established by the plan administrator) withheld pursuant to the Purchase
     Plan. The amount withheld will be used to purchase shares of common stock
     on dates specified by the board at a price that will be equal to 85.0% of
     the lesser of the fair market value of the common stock at the commencement
     of each Purchase Plan offering period or at the relevant purchase date.
     Employees may end their participation in a Purchase Plan offering at any
     time during the Purchase Plan offering period except as provided under the
     terms of the Purchase Plan offering. Participation ends automatically on
     termination of employment with the Company.

     The initial Purchase Plan offering commenced in October 1997 and terminated
     on December 31, 1997. Four additional Purchase Plan offerings plans
     commenced, on January 1, 1998, July 1, 1998, January 1, 1999 and July 1,
     1999, and terminated on June 30, 1998, December 31, 1998, June 30, 1999 and
     December 31, 1999, respectively. Another Purchase Plan offering commenced
     January 1, 2000, and will terminate no later than December 31, 2001. As of
     December 25, 1999, and December 26, 1998, 51,665 and 12,150 shares had been
     issued under the Purchase Plan, respectively. In January 2000, 14,899
     shares of common stock were issued pursuant to the Purchase Plan for
     approximately $14,000.

     PRO FORMA RESULTS OF OPERATIONS
     The weighted-average, grant-date fair value, computed in accordance with
     the measurement provisions of SFAS No. 123, ACCOUNTING FOR STOCK-BASED
     COMPENSATION, of all options granted during fiscal 1999,1998 and 1997 was
     $47,000, $95,000 and $61,000, respectively. The weighted average,
     grant-date fair value was estimated in fiscal 1999, 1998, and 1997,
     respectively, assuming risk-free interest rates of 5.96%, 5.22% and 5.97%,
     an expected life of five years, expected volatility of 75.0% for 1999,
     61.4% for 1998 and 55.0% for 1997.


                                      41
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Results of operations, computed on a pro forma basis to assume that the
     measurement provisions of SFAS No. 123 had been adopted, would have been as
     follows for fiscal 1999, 1998 and 1997 (in thousands, except per share
     information):

<TABLE>
<CAPTION>

                                                             1999                         1998                         1997
                                                 --------------------------   --------------------------   -------------------------
                                                     AS            PRO            AS            PRO            AS           PRO
                                                   REPORTED       FORMA         REPORTED       FORMA         REPORTED      FORMA
<S>                                              <C>           <C>            <C>           <C>            <C>           <C>
       Net income (loss)                         $   (11,120)  $   (11,146)   $      396    $       377    $    5,180    $    5,173
                                                 ------------  ------------   -----------   ------------   -----------   -----------
       Pro forma net income,
        as though a C corporation                                                                          $    3,179    $    3,173
                                                                                                           -----------   -----------

       Historical earnings per share:
         Basic earnings (loss) per share         $      (1.62) $      (1.62)  $      0.06   $       0.06   $     1.10    $     1.10
                                                 ------------  ------------   -----------   ------------   -----------   -----------
       Diluted earnings (loss) per share         $      (1.62) $      (1.62)  $      0.06   $       0.05   $     1.03    $     1.03
                                                 ------------  ------------   -----------   ------------   -----------   -----------

       Pro forma earnings per share,
        as though a C corporation
         Basic earnings per share                                                                          $     0.68    $     0.68
                                                                                                           -----------   -----------
         Diluted earnings per share                                                                        $     0.58    $     0.58
                                                                                                           -----------   -----------
</TABLE>


                                      42
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

7.   Lease Commitments

     The Company operates its stores, main office and warehouse from facilities
     under operating lease agreements which expire at various dates through
     2010. The store leases require minimum annual rentals plus, in some cases,
     periodic increases stipulated in the lease agreements (fixed amounts or
     percentages, in some cases, and increases indexed to consumer price
     increases, in other cases). Some leases also provide for contingent rentals
     based on sales. The Company is generally responsible for maintenance,
     insurance and property taxes. At December 25, 1999, future minimum lease
     payments under all non-cancelable leases are as follows (in thousands):

<TABLE>

<S>                                                 <C>
         2000                                       $        14,158
         2001                                                13,927
         2002                                                13,660
         2003                                                13,039
         2004                                                11,873
         Thereafter                                          31,156
                                                    ----------------
               Total                                $        97,813
                                                    ================
</TABLE>

     Rent expense was $14,039,000, $11,293,000 and $8,912,000 during fiscal
     years 1999, 1998 and 1997, including contingent rentals of $49,000, $62,000
     and $119,000, respectively.

8.   EMPLOYEE BENEFIT PLAN

     The Company has a 401(k) profit-sharing plan for the benefit of employees
     who meet certain eligibility requirements. Participants may make tax
     deferred contributions of up to 15% of earned income, limited to the
     maximum allowed under the Internal Revenue Code. Employer contributions
     match at least 50% of participant contributions to a maximum of 2% of
     earned income. Employee contributions vest immediately. Employer
     contributions vest based on years of employment with the Company, with full
     vesting in five years. The profit-sharing expense was $61,000, $61,000 and
     $81,000 in fiscal years 1999, 1998 and 1997, respectively.


                                      43
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

9.   Income Taxes

     The provision (benefit) for income taxes consists of (in thousands):

<TABLE>
<CAPTION>

                                                                           FISCAL YEAR ENDED
                                                     ----------------------------------------------------------
                                                          DECEMBER 25,        DECEMBER 26,       DECEMBER 27,
                                                             1999                1998                1997
<S>                                                <C>                 <C>                 <C>
       Currently payable:
         Federal                                   $        (1,566)    $           525     $          1,264
         State                                                 156                 254                   15
       Deferred:
         Federal                                            (3,104)               (351)                 (13)
         State                                                (673)                (57)                 176
       Net deferred tax assets recorded
       upon change in tax status from
       S corporation to C corporation                            -                   -               (1,324)
                                                   ---------------     ---------------     ----------------
                                                   $        (5,187)    $           371     $            118
                                                   ===============     ===============     ================
</TABLE>


                                      44
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     The components of deferred income taxes are as follows (in thousands):

<TABLE>
<CAPTION>

                                                                              DECEMBER 25,       DECEMBER 26,
                                                                                  1999               1998
<S>                                                                      <C>                <C>
       Depreciation                                                      $         2,350    $          1,149
       Inventory - Uniform capitalization                                            731                 337
       Inventory - method change                                                      94                 131
       Stock compensation programs                                                   199                 240
       Deferred rent and other accrued liabilities                                   481                 484
       Net operating loss carryforward                                             1,448                 436
       State income taxes                                                           (365)               (105)
       Restructuring charges                                                       2,019                   -
       Other                                                                          20                  28
                                                                         ---------------    ----------------
                                                                                   6,977               2,700
       Valuation allowance                                                          (500)                  -
                                                                         ---------------    ----------------
               Net deferred income taxes                                 $         6,477    $          2,700
                                                                         ===============    ================
</TABLE>

     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely than not that some portion or all of the deferred
     taxes will not be realized. An allowance of $500,000 was recorded in 1999
     against state deferred tax assets that may not be realized. Management
     believes the balance of the deferred tax assets will be realized from
     reversal of the existing net deductible temporary differences during
     periods in which carrybacks are available and/or in which the Company will
     generate net taxable income.


                                      45
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Net operating loss carryforwards at December 25, 1999, available to reduce
     future taxable income are approximately $2,753,000 and will expire as
     follows:

<TABLE>

<S>                                                   <C>
         2008                                         $       114,000
         2009                                                 795,000
         2010                                                  40,000
         2011                                                  35,000
         2012                                                  97,000
         Thereafter                                         1,672,000
                                                      ----------------
                                                      $     2,753,000
                                                      ================
</TABLE>

     Of the net operating losses, $1,081,000 represents losses acquired in a
     business combination. Due to the change in ownership rules under Internal
     Revenue Code Section 382, the use of the acquired net operating losses is
     limited to approximately $75,000 annually.


                                      46
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Differences between the Company's provision (benefit) for income taxes and
     the federal statutory tax rate are:

<TABLE>
<CAPTION>

                                                                           FISCAL YEAR ENDED
                                                        ------------------------------------------------------
                                                          DECEMBER 25,       DECEMBER 26,       DECEMBER 27,
                                                             1999               1998                1997
<S>                                                     <C>                <C>                 <C>
         Federal statutory rate                                 (34.0)%              34.0 %             34.0 %
         Benefit due to Subchapter S
          tax status                                                -                   -              (12.0)
         State income taxes                                      (2.6)                5.2                3.6
         Nondeductable goodwill and
          other permanent differences                             4.8                 9.2                1.4
         Effect of change from S to C
          corporation tax status                                    -                   -              (24.9)
         Other                                                      -                   -                0.1
                                                        ---------------    ----------------    ---------------
                                                                (31.8)%              48.4 %              2.2 %
                                                        ===============    ================    ===============
</TABLE>

10.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used by the Company in
     estimating the fair value of its significant financial instruments:

         CASH AND CASH EQUIVALENTS: The carrying amounts reported in the
         consolidated balance sheets approximate fair value because of the
         immediate or short-term maturity of these financial instruments.

         LONG-TERM DEBT: The carrying amounts, totaling $15,539,000 and
         $11,510,000 at December 25, 1999 and December 26, 1998, respectively,
         are believed to approximate fair value due to the floating interest
         rate on the majority of these financial instruments.


                                      47
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         LETTERS OF CREDIT: The Company had outstanding irrevocable letters of
         credit in the amount of $189,000 and $550,000 at December 25, 1999 and
         December 26, 1998, respectively. These letters of credit collateralize
         certain of the Company's obligations to third parties for the purchase
         of inventory. The fair value of these off - balance sheet letters of
         credit approximates contract values based on the nature of the fee
         arrangements with the issuing bank.

11.  SUPPLEMENTAL CASH FLOW INFORMATION

     Supplemental cash flow information is as follows (in thousands):

<TABLE>
<CAPTION>

                                                                          FISCAL YEAR ENDED
                                                      --------------------------------------------------------
                                                         DECEMBER 25,       DECEMBER 26,       DECEMBER 27,
                                                            1999               1998               1997
<S>                                                   <C>                <C>                 <C>
       Interest paid                                  $         1,213    $            294    $         1,360
                                                      ===============    ================    ===============
       Income taxes paid                              $           938    $          1,312    $           644
                                                      ===============    ================    ===============
       Noncash investing and financing transactions:
         Acquisitions of businesses:
           Purchase price, including
             acquisition costs                        $             -    $          1,501    $           558
            Minority interest eliminated                            -                   -                105
            Less debt issued in connection
             with the acquisition                                   -                   -               (663)
            Less retention                                          -                (100)                 -
                                                      ---------------    ----------------    ---------------
          Cash paid for acquisitions                  $             -    $          1,401    $             -
                                                      ===============    ================    ===============
</TABLE>


12.  BUSINESS COMBINATIONS

     OVERLAND TRADING COMPANY
     On October 25, 1996, Track 'n Trail-California, together with its
     stockholders, obtained 33 Overland Trading stores by acquiring the
     outstanding common stock of Overland. Track 'n Trail-California and its
     stockholders purchased 79.0% and 21.0%, respectively, of the common stock
     of Overland. As part of the purchase consideration, Track `n Trail
     California issued warrants which give the sellers the right to purchase up
     to 49,392 shares of the Company's common stock at $10.50 per share until
     October 25, 2001. Additionally, Track 'n Trail-California issued warrants
     to an investment bank in consideration of financial advisory services
     rendered in connection with the acquisition of Overland. The warrants allow
     the investment bank to purchase up to 74,089 shares of the Company's common
     stock at $12.60 per share for four years commencing October 1998. The
     warrants held by both the Overland sellers and the investment bank were
     assigned only a nominal value because of the restrictive terms of the
     warrants when issued. All such warrants remain outstanding at December 25,
     1999.


                                      48
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Effective on January 1, 1997, Track 'n Trail-California acquired from its
     stockholders the remaining 21.0% interest in Overland at their purchase
     price by assuming notes of $663,000 previously issued by Track 'n
     Trail-California's stockholders as their purchase consideration for the
     21.0% interest.

     NEVIN'S EAGLES NEST
     On August 26, 1998, the Company acquired all the outstanding shares of
     capital stock of Eagles Nest. The purchase price of the shares was $1.5
     million in cash, $100,000 of which was paid in fiscal 1999.

     The acquisition was accounted for using the purchase method of accounting.
     The purchase price was allocated to the fair value of the assets and
     liabilities acquired as follows: $1.3 million to current assets, $244,000
     to property, plant and equipment, $518,000 to other assets, $1.1 million to
     accounts payable and other accrued liabilities and $1.4 million to debt and
     capital lease obligations. This resulted in goodwill of $2.0 million.

     Accumulated amortization at December 25, 1999 and December 26, 1998, on
     goodwill recorded in connection with the Eagles Nest acquisition, was $0
     and $33,000, respectively. The goodwill associated with the Eagles Nest
     acquisition was written off in December 1999, in connection with the
     restructuring described above.


                                      49
<PAGE>

TRACK 'N TRAIL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     The following unaudited pro forma summary combines the consolidated results
     of operations of the Company and Eagles Nest as if the acquisition had
     occurred at the beginning of fiscal 1997 and fiscal 1998 after giving
     effect to certain adjustments, including amortization of goodwill, revised
     depreciation based on estimated fair market values, and revised interest
     expense based on the additional borrowings and interest rate differentials
     on Eagles Nest debt retired at acquisition. The pro forma summary does not
     necessarily reflect the results of operations as they would have been if
     the Company and Eagles Nest had constituted a single entity during such
     periods (in thousands, except per share information):

<TABLE>
<CAPTION>

                                                                                    PRO FORMA, ASSUMING
                                                                                  ACQUISITION OCCURRED AT
                                                                                    BEGINNING OF FISCAL
                                                                                       YEARS ENDED
                                                                                        (UNAUDITED)
                                                                            ------------------------------------
                                                                              DECEMBER 26,        DECEMBER 27,
                                                                                 1998                1997
<S>                                                                        <C>                 <C>
       Net sales                                                           $        103,224    $         98,731
                                                                           ================    ================
       Net income before income taxes                                      $            218    $          5,077
       Income tax                                                                       178                  59
                                                                           ----------------    ----------------
       Net income                                                          $             40    $          5,018
                                                                           ================    ================
       Earnings per share:
           Basic                                                           $           0.01    $           1.07
                                                                           ================    ================
           Diluted                                                         $           0.01    $           1.00
                                                                           ================    ================

       Net income before income taxes                                                          $          5,077
       Pro forma income tax provision                                                                     2,031
                                                                                               ----------------
       Pro forma net income                                                                    $          3,046
                                                                                               ================
       Pro forma earnings per share:
           Basic                                                                               $           0.65
                                                                                               ================
           Diluted                                                                             $           0.56
                                                                                               ================
</TABLE>

13.  CONTINGENCIES

     Beginning in October 1999, the Company is partially self insured for health
     insurance, workers' compensation and property and liability insurance. The
     Company's policy is to accrue undiscounted amounts which are estimated
     based upon the Company's actual and industry experience. Changes in
     assumptions for such matters as legal actions, medical costs and changes in
     actual experience could cause these estimates to change.

     The Company is involved in various claims arising out of the normal course
     of the conduct of business. Management believes, after reviewing such
     matters with legal counsel, that the outcome of pending claims will not
     have a material adverse effect on the Company's consolidated results of
     operations or consolidated financial position.


                                      50
<PAGE>


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND
          FINANCIAL DISCLOSURE.

          Not Applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

          Information with respect to this item is incorporated by reference
from the registrant's definitive Proxy Statement to be filed with the
Commission not later than 120 days after the end of the registrant's fiscal
year.

ITEM 11. EXECUTIVE COMPENSATION.

          Information with respect to this item is incorporated by reference
from the registrant's definitive Proxy Statement to be filed with the
Commission not later than 120 days after the end of the registrant's fiscal
year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          Information with respect to this item is incorporated by reference
from the registrant's definitive Proxy Statement to be filed with the
Commission not later than 120 days after the end of the registrant's fiscal
year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          Information with respect to this item is incorporated by reference
from the registrant's definitive Proxy Statement to be filed with the
Commission not later than 120 days after the end of the registrant's fiscal
year.


                                     51
<PAGE>

                               PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) The following documents are filed as a part of this Form 10-K:

      1.   Financial Statements:
              Reference is made to the Index to Consolidated Financial
              Statements under Item 8 in Part II of this Form 10-K.

      2.   Financial Statement Schedules:
              Financial statement schedules are omitted because they are not
              applicable or the required information is shown in the financial
              statements or notes thereto.

      3.   Exhibits:
              The exhibits listed below are required by Item 601 of Regulation
              S-K. Each management contract or compensatory plan or arrangement
              required to be filed as an exhibit to this Form 10-K has been
              identified.


                                       52
<PAGE>

<TABLE>
<CAPTION>
         Exhibit
          NUMBER               NOTES             DESCRIPTION OF DOCUMENT
         -------               -----             -----------------------
<S>                          <C>              <C>
            3.1                  (1)            Amended and Restated Certificate of Incorporation of the Registrant.
            3.2                  (1)            Amended and Restated Bylaws of the Registrant.
            4.1                  (1)            Form of Common Stock Certificate.
            4.2                  (1)            Registration Rights Agreement among the Registrant and certain stockholders.
           10.1                  (1)            Employment Agreement dated January 3, 1994 between Registrant and
                                                Gregory M. Kilgore.
           10.2                  (1)            Employment Agreement dated January 3, 1994 between Registrant and
                                                John E. Wilkinson.
           10.3                  (1)            Employment Agreement dated January 3, 1994 between Registrant and
                                                Daniel J. Nahmens.
           10.4                  (1)            Employment Agreement dated January 3, 1994 between Registrant and
                                                David T. Morgan.
           10.5                  (1)            Amended and Restated 1996 Stock Option Plan.
           10.6                  (1)            Form of Incentive Stock Option and Stock Option Agreement, as amended.
           10.7                  (1)            Form of Nonqualified Stock Option and Stock Option Agreement, as amended.
           10.8                  (1)            Agreement for Distribution of Accumulated Adjustments Account and
                                                Tax Indemnification.
           10.9                  (1)            Form of Indemnification Agreement between the Company and directors and
                                                certain officers.
           10.10                 (1)            Stock Exchange Agreement between the Company, Track 'n Trail-California
                                                and certain stockholders.
           10.11                 (1)            Warrant to Purchase Common Stock issued to Ladenburg Thalmann & Co. Inc.
           10.12                 (1)            Form of Warrant to Purchase Common Stock issued to stockholders of Overland
                                                Management Corporation.
           10.13                 (2)            Amended and Restated Loan Agreement dated as of  October 4, 1999 between
                                                Union Bank of California, N.A. and the subsidiaries of the Registrant.
           10.14                 (3)            Continuing Guaranty dated as of September 25, 1997 between Union Bank of
                                                California, N.A.  and the Registrant.
           10.15                 (4)            1998 Bonus Plan for Officers of the Registrant.
           10.16                 (5)            1999 Bonus Plan for Officers of the Registrant.
           10.17                 (5)            Lease Agreement dated as of September 18, 1998 between Spieker Properties,
                                                L.P.  and the Registrant.
           10.18                                2000 Bonus Plan for Officers of the Registrant
           10.19                                Agreement and Release of Claims dated October 25, 1999 between Gregory M.
                                                Kilgore and the Registrant.
           10.20                                First Amendment dated January 26, 2000 to
                                                the Loan Agreement dated October 4, 1999
                                                between Union Bank of California, N.A. and
                                                the Registrant.
           10.21                                Second Amendment dated January 26, 2000 to
                                                the Loan Agreement dated October 4, 1999
                                                between Union Bank of California, N.A. and
                                                the Registrant.
           21.1                  (1)            List of Subsidiaries of the Registrant.
           23.1                                 Consent of PricewaterhouseCoopers LLP.
           24.1                                 Power of Attorney (see page 55 of this Form 10-K).
           27.1                                 Financial Data Schedule.
</TABLE>


                                       53
<PAGE>

Notes

     (1)   Filed with Registrant's Registration Statement on Form S-1 (File No.
           333-23195).

     (2)   Filed with Registrant's Quarterly Report on Form 10-Q for the quarter
           ended September 25, 1999.

     (3)   Filed with Registrant's Annual Report on Form 10-K for the year ended
           December 27, 1997.

     (4)   Filed with Registrant's Quarterly Report on Form 10-Q for the quarter
           ended March 28, 1998.

     (5)   Filed with Registrant's Annual Report on Form 10-K for the year ended
           December 26, 1998.

(b)  Reports on Form 8-K.
     A Form 8-K was filed on October 26, 1999 announcing the termination of the
     Company's President Gregory M. Kilgore.


                                       54
<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
March 21, 2000 on its behalf by the undersigned, thereunto duly authorized.


                                         TRACK 'N TRAIL

                                         By  /s/ DAVID L. SUECHTING, JR
                                         David L. Suechting, Jr.
                                         President and Chief Executive Officer




                                POWER OF ATTORNEY

          KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David L. Suechting, Jr. and Daniel J.
Nahmens, and each of them, his or her true and lawful attorneys-in-fact, each
with full power of substitution, for him or her in any and all capacities, to
sign any amendments to this report on Form 10-K and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or their substitute or substitutes may do or
cause to be done by virtue hereof.

          Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Signature                                      Title                                            Date
<S>                                  <C>                                                        <C>
/s/ DAVID L. SUECHTING, JR           President, Chief Executive Officer
                                     and Chairman of the Board                                  3/21/00

/s/ DANIEL J. NAHMENS                Executive Vice President - Finance, Chief Financial
                                     Officer (Principal Financial and
                                     Accounting Officer), Treasurer and Secretary               3/21/00

/s/ BARBARA J. SUECHTING             Director                                                   3/21/00

/s/ HELEN C. BULWIK                  Director                                                   3/21/00

/s/ STEVEN D. TOUGH                  Director                                                   3/21/00

</TABLE>

                                       55