FIVE-YEAR FINANCIAL HIGHLIGHTS

The following table sets forth selected historical consolidated
financial data for the business conducted by Rawlings Sporting
Goods Company, Inc. (Rawlings or the Company) for the years ended
August 31, 1998, 1997, 1996 and 1995, the eight months ended
August 31, 1994 and the year ended December 31, 1993.



(Amounts in thousands                 Years Ended August 31,
except per share data)        1998      1997      1996      1995

INCOME STATEMENT
DATA: /1/
Net revenues             $170,604   $147,600  $149,735  $144,141
Operating income            9,989     11,880    11,666    11,598
Net income                  3,660      5,470     5,272     4,584
Net income per share         0.47       0.71      0.69      0.60

BALANCE SHEET DATA:
Total assets             $132,532   $101,264  $102,252  $ 97,783
Long-term debt,
   including current
   maturities              57,109     32,673    38,700    43,900


                                 Eight Months          
                                 Ended               Year Ended
(Amounts in thousands            August 31,          December 31,
except per share data)              1994                 1993

INCOME STATEMENT                 
DATA:  /1/               
Net revenues                     $81,174             $139,615
Operating income                   2,935                7,138
Net income                         1,335                3,922
Net income per share                  (1)                  (1)

BALANCE SHEET DATA:
Total assets                     $93,752             $ 67,616
Long-term debt,
   including current
   maturities                     39,480                1,262

/1/  Net income per share has not been presented for each period because,
     prior to July 8, 1994, the Company's predecessor was a division of
     Figgie International, Inc.  (the former parent) and had no separately
     issued equity securities.  


NET REVENUES BY PRINCIPAL PRODUCT LINE AND BY GEOGRAPHIC AREA (UNAUDITED)


                                   Years Ended August 31,
(Amounts in millions)      1998         1997      1996      1995

BY PRINCIPAL
PRODUCT LINE:
Equipment:               
   Baseball              $ 94.0       $ 86.3    $ 93.8    $ 94.7
   Basketball, football
     and volleyball        34.4         29.7      25.3      24.3
   Hockey                   8.6          0.7       0.9       0.5
Apparel                    20.7         16.9      14.7      10.4
Licensing                   5.9          6.5       6.9       6.2
Miscellaneous               7.0          7.5       8.1       8.0
NET REVENUES             $170.6       $147.6    $149.7    $144.1


BY GEOGRAPHIC AREA:
Domestic                 $155.1       $137.5    $139.2    $131.9
Foreign                    15.5         10.1      10.5      12.2
NET REVENUES             $170.6       $147.6    $149.7    $144.1


                                 Eight Months          
                                 Ended               Year Ended
                                 August 31,          December 31,
(Amounts in millions)              1994                1993

BY PRINCIPAL
PRODUCT LINE:
Equipment:               
   Baseball                        $ 50.9              $ 91.1
   Basketball, football
     and volleyball                  14.5                22.6
   Hockey                             0.2                 0.9
Apparel                               5.3                10.1
Licensing                             5.6                 4.5
Miscellaneous                         4.7                10.4
NET REVENUES                       $ 81.2               139.6

BY GEOGRAPHIC AREA:
Domestic                           $ 70.8              $127.8
Foreign                              10.4                11.8
NET REVENUES                       $ 81.2              $139.6

<PAGE>
CAUTIONARY STATEMENTS

Cautionary statements identifying important factors that could
cause the Company's future results to differ materially from past
results, or those contemplated by statements herein regarding
matters other than historical fact (i.e., forward-looking
statements), are described in, and incorporated by reference
from, the Company's 1998 Annual Report on Form 10-K.


YEAR ENDED AUGUST 31, 1998 COMPARED TO THE YEAR ENDED AUGUST 31,
1997

RESULTS OF OPERATIONS

Net revenues for the year ended August 31, 1998 (1998) were
$170,604,000 or 15.6 percent higher than net revenues of
$147,600,000 for the year ended August 31, 1997 (1997). Net
revenues in 1998 excluding the impact of the Victoriaville (Vic)
hockey business acquired in September 1997 increased 9.8 percent
over 1997. The Company experienced 8.9 percent growth in net
revenues of baseball-related products including net revenues from
new products (new aluminum bat line and the radar speed-sensing
baseballs) and a resurgence in baseball glove sales. The recent
changes in the National Collegiate Athletic Association (NCAA)
regulations regarding adult aluminum baseball bats has created
uncertainty in the aluminum bat category. This uncertainty may
delay the Company's plans to aggressively grow the aluminum bat
category. However, baseball's continued resurgence is expected to
result in continued sales growth in all other major baseball-related
categories. Net revenues from basketball, football and
volleyball equipment increased 15.9 percent primarily fueled by
growth at major accounts. The Company anticipates continued
growth in these categories in fiscal 1999. Apparel net revenues
increased 23.1 percent and the Company expects continued double-digit
growth in fiscal 1999 and beyond.

Gross margin in 1998 was 30.2 percent, down 0.6 of a margin point
from the 1997 gross margin of 30.8 percent. Decreased licensing
revenues and the write-off associated with early adoption of the
new NCAA aluminum bat standard were primarily responsible for the
decrease.

Selling, general and administrative (SG&A) expenses for 1998 were
$39,989,000 or 19.0 percent higher than SG&A expenses of
$33,609,000 in fiscal 1997. As a percent of net revenues SG&A
expenses were 23.4 percent in fiscal 1998 compared to 22.8
percent in fiscal 1997. Higher variable salesmen compensation,
royalties, advertising and promotion costs and the costs
associated with the write-off of the prior computer system were
primarily responsible for the increase.

Unusual charges of $1,475,000 in 1998 included a $975,000
environmental charge associated with additional remediation costs
at the Company's Dolgeville, New York facility and a $500,000 one
time charge associated with changes in the Chief Executive
Officer's position. This charge included severance and related
benefits, legal costs and other costs associated with changes in
the Chief Executive Officer's position.

Excluding the unusual charges, write-offs relating to aluminum
bats and the Company's prior computer system and the results of
the licensing and hockey businesses, our core business had an
exceptional year with operating income increasing 35.8 percent
and net revenues gaining 11.2 percent. The hockey business
performance was disappointing, but with the majority of the U.S.
transition issues resolved, the Company is poised for improved
hockey results in 1999. Our licensing business suffered from the
negative currency impact of the devaluation of the Japanese yen.
The actions taken to improve hockey combined with the accelerated
rate of baseballs' recovery have us optimistic that improvements
in sales and earnings are achievable in 1999.

Interest expense of $4,218,000 in 1998 was 35.4 percent higher
than interest expense of $3,115,000 in 1997. Higher average debt
outstanding resulting from the Vic hockey acquisition and higher
working capital levels were primarily responsible for the
increase.

The effective tax rate of 33.7 percent in 1998 was 3.3 points
lower than the effective tax rate of 37.0 percent in 1997. The
decrease in the effective tax rate is primarily the result of a
change in the mix of foreign and domestic income.
<PAGE>
YEAR ENDED AUGUST 31, 1997 COMPARED TO THE YEAR ENDED AUGUST 31,
1996

RESULTS OF OPERATIONS

Net revenues for 1997 were $147,600,000, or 1.4 percent below net
revenues of $149,735,000 for the year ended August 31, 1996
(1996). Lower net revenues from baseball-related products,
partially offset by higher net revenues from basketball, football
and volleyball equipment and apparel were primarily responsible
for the decrease. Net revenues of baseball-related products
decreased 8.0 percent resulting from a) lower sales of baseball
gloves as a result of significant reductions at two major
warehouse club chains who decided to stop selling baseball-related
products and a reduction in net revenues at a third major
account, which entered the selling season with excess inventory
and b) lower sales of baseballs primarily as a result of reduced
net revenues from memorabilia baseballs. Net revenues for
basketball, football and volleyball equipment increased 17.1
percent as a result of higher net revenues related to major
corporate promotions and increased back-to-school programs.
Apparel net revenues increased 14.8 percent as a result of
increases in both the custom and stock uniform business.

Gross margin in 1997 was 30.8 percent, down 0.2 of a point from
the 1996 gross margin of 31.0 per cent. Increased net revenues of
lower margin products including basketball, football and
volleyball equipment and apparel were primarily responsible for
the decrease. The Company achieved continued improvement in the
gross margin on apparel products in 1997.

SG&A expenses for 1997 of $33,609,000 were $1,141,000, or 3.3
percent below SG&A expenses of $34,750,000 in 1996. As a percent
of net revenues, the SG&A expenses in 1997 were 22.8 percent
compared to 23.2 percent in 1996. Lower royalties, commissions
and advertising and promotion costs were primarily responsible
for the decrease.

Interest expense of $3,115,000 in 1997 decreased 14.8 percent
from $3,656,000 in 1996 as a result of lower average borrowings
and average interest rates.

The effective tax rate of 37.0 percent in 1997 was 4.9 points
higher than the effective tax rate of 32.1 percent in 1996. The
increase in the effective tax rate is the result of 1996
including an adjustment for the lower foreign effective tax rates
on a portion of the Company's income generated and indefinitely
reinvested in Costa Rica.

SEASONALITY

Net revenues of baseball equipment and team uniforms are highly
seasonal. Customers generally place orders with the Company for
baseball-related products beginning in August for shipment
beginning in November (pre-season orders). These pre-season
orders from customers generally represent approximately 50
percent to 65 percent of the customers' anticipated needs for the
entire baseball season.  The amount of these pre-season orders
generally determine the Company's net revenues and profitability
between November 1 and March 31. The Company then receives
additional orders (fill-in orders) which depend upon customers'
actual sales of products during the baseball season (sell-through).
Fill-in orders are typically received by the Company
between February and May. These orders generally represent
approximately 35 percent to 50 percent of the Company's sales of
baseball-related products during a particular season. Pre-season
orders for certain baseball-related products from certain
customers are not required to be paid until early spring. These
extended terms increase the risk of collectibility of accounts
receivable. An increasing number of customers are on automatic
replenishment systems; therefore, more orders are received on a
ship-at-once basis. This change has resulted in shipments to the
customer closer to the time the products are actually sold. This
trend has and may continue to have the effect of shifting the
seasonality and quarterly results of the Company with higher
inventory and debt levels required to meet orders for immediate
delivery. The sell-through of baseball-related products also
affects the amount of inventory held by customers at the end of
the season which is carried over by the customer for sale in the
next baseball season. Customers typically adjust their pre-season
orders for the next baseball season to account for the level of
inventory carried over from the preceding<PAGE> baseball season.
Football equipment and team uniforms are both shipped by the
Company and sold by retailers primarily in the period between
March 1 and September 30. Hockey equipment and uniforms are
shipped by the Company primarily in the period from May 1 to
October 31. Basketballs and team uniforms generally are shipped
and sold throughout the year. Because the Company's sales of
baseball-related products exceed those of its other products,
Rawlings' business is seasonal, with its highest net revenues and
profitability recognized between November 1 and April 30.

INTEREST RATE AND FOREIGN CURRENCY MANAGEMENT ACTIVITIES

The Company has engaged in interest rate and foreign currency
management activities with the objective of limiting exposure to
interest rate increases related to the Company's long-term debt
by converting a portion of the Company's variable rate debt to a
fixed rate and limiting the exposure to foreign currency exchange
rate fluctuations. The interest rate and foreign currency
objectives are achieved through the use of interest rate swaps as
described in Note 9 to the financial statements and the foreign
currency contracts as described in Note 1 to the financial
statements.

ENVIRONMENTAL MATTERS

The Company has been conducting environmental investigation and
remediation activities at its Dolgeville, New York facility (the
"Site") with respect to the release of wood pitch into surround-
ing soil and surface water. In November 1997, the Company entered
into a Voluntary Agreement with the New York State Department of
Environmental Conservation (the "NYSDEC") to conduct certain
environmental remediation activities related to the presence of
wood pitch in the soils at the Site. The wood pitch was generated
as a result of the operation, before Rawlings' ownership of the
Site, of a retort facility by a third party unrelated to
Rawlings. In December 1997, an environmental consulting firm
retained by Rawlings initiated remediation activities under the
oversight of the NYSDEC. In conducting the remediation activities
under the Voluntary Agreement, it was discovered that the actual
volume of wood pitch substantially exceeded the amount originally
estimated by the environmental consulting firm. Some of the unan-
ticipated, additional wood pitch has been remediated in
accordance with the requirements of the Voluntary Agreement. The
Company believes that a portion of the unanticipated, additional
volume of wood pitch remaining at the Site may be outside the
scope of the current Voluntary Agreement. Nevertheless, the
Company expects to be required to address such additional wood
pitch through an amendment to the Voluntary Agreement. In May
1998, the Company's environmental consultants completed an
investigation of the amount of the additional wood pitch at the
Site. Based upon the report received from the environmental
consultants and the Company's historical experience with
environmental matters at this Site, the Company recorded a
$975,000 charge to remediate the additional unanticipated wood
pitch, which is reflected in unusual charges in the accompanying
consolidated statement of income for 1998. In the year ended
December 31,1993, the Company recorded a charge of $1,559,000
which included the estimated clean up costs at this Site. The
Company's reserve for remediation costs as of August 31, 1998 was
$1,082,000. In management's view, this amount is adequate to
cover the expected remediation activities at the wood pitch Site.

In June 1998, the Company filed an action in the Northern
District of New York against Trident Rowan Group, Inc. (Trident
Rowan), which the Company believes is the successor to the entity
which owned the wood pitch Site during the period in which the
wood pitch contamination occurred. The Company believes that the
case against Trident Rowan is strong and all or a portion of the
clean up costs associated with the wood pitch at the Site may be
recoverable. However, due to the uncertainty associated with this
matter, no receivable associated with a potential recovery has
been recorded at this time and there can be no assurance that any
amount will be recovered.
<PAGE>
YEAR 2000 ISSUES

The Company has initiated a comprehensive program to replace its
computer systems and applications with a Year 2000 compliant
enterprise-wide system. The assessment phase of the Company's
system migrations is complete and the systems testing and
implementation stages are in progress. To date, a majority of the
Company's locations and processes have been successfully migrated
to the new system with completion expected by June 1999. The
Company has incurred capital expenditures, including hardware,
software, outside consultants and other expenses, of
approximately $2.5 million on its new enterprise-wide system and
expects that full implementation of the system will require an
additional $500,000 over the next year. In addition, the Company
incurred approximately $300,000 in software selection and
training costs that were expensed during fiscal 1998 and fiscal
1997.

The Company has formally communicated with its major vendors and
suppliers to determine the extent to which the Company may be
vulnerable to those third parties' failure to remediate their own
Year 2000 issues. The first phase, which included sending Year
2000 surveys and questionnaires to customers and vendors is
complete and the response evaluation phase is currently in
progress. The Company has not had sufficient response from
vendors to provide an estimate of the potential impact of
non-compliance on the part of such vendors. Management is currently
developing contingency plans which include, but are not limited
to, evaluating alternative vendors who are Year 2000 compliant
and evaluating inventory management plans.  It is too early to
determine to what extent, if any, these contingency plans will
have to be implemented. Although the Company expects to be Year
2000 compliant by mid-1999 and does not expect to be materially
impacted by the external environment, such future events cannot
be known with certainty.  Furthermore, the Company's estimates of
future migration costs and completion dates are based on
presently available information and will be updated, as
additional information becomes available.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity are cash provided by
operating activities and the amended and restated credit
agreement with a bank group more fully described in Note 9 to the
financial statements. The Company's primary use of cash is to
fund its working capital needs, capital expenditures,
acquisitions and debt service requirements. The Company's working
capital requirements are seasonal with higher investments in
working capital generally required in the period that begins in
August and ends in April of the succeeding year. The change in
the timing of orders and shipments to retailers closer to when
the products are actually sold to the retailers' customers may
increase the amount of working capital required by the Company
and may increase required levels of long-term debt. Detailed
information on the Company's cash flows is presented in the
consolidated statements of cash flows.

YEAR ENDED AUGUST 31, 1998

Operating activities used cash of $8,584,000 primarily the result
of increases in accounts receivable and inventories partially
offset by net income and depreciation and amortization. Operating
cash flows were $17,135,000 lower than 1997 primarily as a result
of higher inventories and lower net income. Investing activities
used cash of $17,698,000 primarily for the acquisition of the Vic
hockey business and capital expenditures for normal property and
plant improvements and to purchase and implement the Company's
new computer system.  With the ongoing upgrade of the Company's
computer system and other planned expenditures for improved
production efficiencies the Company expects capital expenditures
of $2,500,000 to $3,000,000 in 1999. Financing activities
provided cash of $26,412,000 which included net borrowings of
$24,436,000 and the issuance of warrants and common stock of
$1,976,000.

The Company believes that cash flow from operations and unused
borrowing capacity under the credit agreement should be
sufficient to fund its anticipated working capital needs, capital
expenditures and debt service requirements for the foreseeable
future. However, because future cash flows and the availability
of financing depend on a number of factors, including prevail-<PAGE>
ing economic conditions and financial, business and other factors
beyond the Company's control, no assurances can be given in this
regard.

YEAR ENDED AUGUST 31, 1997

Operating cash flows of $8,551,000 were primarily the result of
net income adjusted for non cash charges and lower inventory
levels partially offset by lower accounts payable and higher
accounts receivable. Operating cash flows were $3,321,000 higher
than 1996 primarily as a result of lower inventory levels and a
smaller increase in accounts receivable partially offset by a
reduction in accounts payable in 1997 compared to an increase in
1996. Investing activities used cash of $2,844,000 primarily for
capital expenditures for normal property and plant improvements,
the upgrading of certain plants to improve production capacity
and efficiency and to upgrade the Company's systems. Financing
activities used cash of $5,764,000 which included a net debt
repayment of $6,027,000 partially offset by issuance of common
stock of $263,000.

YEAR ENDED AUGUST 31, 1996

Operating cash flows of $5,230,000 were primarily the result of
net income adjusted for non cash charges partially offset by
increased accounts receivable and inventories. Operating cash
flows were $1,369,000 higher than the year ended August 31, 1995
(1995) primarily as a result of higher net income and changes in
various components of working capital. Investment activities used
cash of $1,193,000 for capital expenditures for normal property
and plant improvements and the upgrading of certain plants to
improve production capacity and efficiency. Financing activities
used cash of $4,585,000 which included a net debt repayment of
$5,200,000 partially offset by issuance of common stock of
$340,000 and a final purchase price settlement with the former
parent of $275,000.

NEW ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board recently issued SFAS
No. 130 "Reporting Comprehensive Income," which establishes
standards for reporting and disclosure of comprehensive income
and its components; SFAS No.131 "Disclosures about Segments of an
Enterprise and Related Information," which establishes annual and
interim reporting standards for an enterprise's operating
segments and related disclosures about its products, services,
geographic areas and major customers; SFAS No.132 "Employers'
Disclosures about Pension and Other Postretirement Benefits,"
which standardizes the disclosure requirements for pensions and
other postretirement benefits and expands disclosures on changes
in benefit obligations and fair values of plan assets; and SFAS
No. 133 "Accounting for Derivative Instruments and Hedging
Activities," which requires that all derivatives be recognized as
either assets or liabilities in the statement of financial
position at fair value unless specific hedge criteria are met.
The Company is required to adopt the provisions of SFAS 130, 131
and 132 in 1999 and SFAS 133 in 2000.  Adoption of these
statements is not expected to significantly impact the Company's
consolidated financial position, results of operations or cash
flows, and any effect will be limited primarily to the form and
content of its disclosures.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE STOCKHOLDERS OF RAWLINGS SPORTING GOODS COMPANY, INC.:

We have audited the accompanying consolidated balance sheets of
Rawlings Sporting Goods Company, Inc. (a Delaware corporation)
and subsidiaries (the Company) as of August 31, 1998 and 1997 and
the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period
ended August 31, 1998. These financial statements are the
responsibility of Rawlings' management. Our responsibility is to
express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards 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. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Rawlings Sporting Goods Company, Inc. and subsidiaries as of
August 31, 1998 and 1997, and the results of their operations and
their cash flows for each of the three years in the period ended
August 31, 1998, in conformity with generally accepted accounting
principles.



ARTHUR ANDERSEN LLP
St. Louis, Missouri
October 7, 1998
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>

                                                        Years Ended August 31,
(Amounts in thousands,                            1998             1997         1996
except per share data)
<S>                                             <C>              <C>          <C>
Net revenues                                    $170,604         $147,600     $149,735
Cost of goods sold                               119,151          102,111      103,319
     Gross profit                                 51,453           45,489       46,416
Selling, general and administrative expenses      39,989           33,609       34,750
Unusual charges (See Note 5)                       1,475               --           --
     Operating income                              9,989           11,880       11,666
Interest expense                                   4,218            3,115        3,656
Other expense, net                                   251               83          250
     Income before income taxes                    5,520            8,682        7,760
Provision for income taxes                         1,860            3,212        2,488
     Net income                                 $  3,660         $  5,470     $  5,272
Net income per common share:
     Basic                                      $   0.47         $   0.71     $   0.69
     Diluted                                    $   0.47         $   0.71     $   0.69
Shares used in computing per share amounts:
     Basic                                         7,777            7,712        7,680
     Assumed exercise of stock options                41                6            1
     Diluted                                       7,818            7,718        7,681

The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                                     August 31,
(Amounts in thousands, except share and per share data)          1998         1997
<S>                                                              <C>          <C>
ASSETS
Current assets:
  Cash and cash equivalents                                      $    862     $    732
  Accounts receivable, net of allowance of 
     $2,043 and $1,627, respectively                               40,352       32,968
  Inventories                                                      43,573       29,781
  Prepaid expenses                                                    673          935
Deferred income taxes                                               4,946        4,083
     Total current assets                                          90,406       68,499
Property, plant and equipment, net                                 12,911        9,802
Other assets                                                          568          760
Deferred income taxes                                              20,321       22,203
Goodwill, net                                                       8,326           --
  Total assets                                                   $132,532     $101,264



LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                              $     61     $     59
  Accounts payable                                                  9,047        7,856
  Accrued liabilities                                              12,547        9,901
     Total current liabilities                                     21,655       17,816
Long-term debt, less current maturities                            57,048       32,614
Other long-term liabilities                                         9,577       10,637
  Total liabilities                                                88,280       61,067
Stockholders' equity:
  Preferred stock, $.01 par value per share, 10,000,000 shares
     authorized, no shares issued and outstanding                      --           --
  Common stock, $.01 par value per share, 50,000,000 shares
     authorized, 7,794,483 and 7,725,814 shares issued and
     outstanding, respectively                                         78           77
  Additional paid-in capital                                       29,479       26,083
  Stock subscription receivable                                    (1,421)          --
  Cumulative translation adjustment                                (1,581)          --
  Retained earnings                                                17,697       14,037
     Stockholders' equity                                          44,252       40,197
     Total liabilities and stockholders' equity                  $132,532     $101,264

The accompanying notes are an integral part of these consolidated balance sheets.
</TABLE>  
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>

                                              Additional          Stock      Cumulative    
(Amounts in thousands,     Common Stock          Paid-in   Subscription     Translation      Retained
except share data)     Shares       Amount       Capital     Receivable      Adjustment      Earnings      Total
<S>                 <C>             <C>       <C>          <C>              <C>              <C>         <C>

Balance,
  August 31, 1995   7,656,908          $77       $25,205       $    --             $ --      $  3,295    $28,577
Net income                 --           --            --            --               --         5,272      5,272
Issuance of 
  common stock         40,619           --           340            --               --            --        340
Final settlement 
  with former 
  parent                   --           --           275            --               --            --        275

Balance, 
  August 31, 1996   7,697,527           77        25,820            --               --         8,567     34,464
Net income                 --           --            --            --               --         5,470      5,470
Issuance of
  common stock         28,287           --           263            --               --            --        263

Balance,
  August 31, 1997   7,725,814           77        26,083            --               --        14,037     40,197
Net income                 --           --            --            --               --         3,660      3,660
Issuance of
  common stock         68,669            1           704            --               --            --        705
Issuance of
  warrants                 --           --         2,692        (1,421)              --            --      1,271
Translation
  adjustments              --           --            --            --           (1,581)           --     (1,581)
Balance,
  August 31, 1998   7,794,483          $78       $29,479       $(1,421)         $(1,581)      $17,697    $44,252

The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

                                                        Years Ended August 31,
(Amounts in thousands)                               1998            1997         1996
<S>                                             <C>              <C>          <C>
Cash flows from operating activities:
  Net income                                    $   3,660        $  5,470     $  5,272
  Adjustments to reconcile net income to
     net cash provided by operating activities:
       Depreciation and amortization                1,781           1,220        1,123
       Loss (gain) on disposal of equipment           101            (150)          --
       Deferred income taxes                        1,019           2,642        1,857
  Changes in operating assets and liabilities:
     Accounts receivable, net                      (3,742)         (2,878)      (5,927)
     Inventories                                  (10,608)          2,634       (1,069)
     Prepaid expenses                                 279             537          135
     Other assets                                      93            (242)          60
     Accounts payable                                  19          (1,263)       2,731
     Accrued liabilities and other                 (1,186)            581        1,048
Net cash (used in) provided by operating 
  activities                                        8,584           8,551        5,230
Cash flows from investing activities:
  Capital expenditures                             (3,600)         (2,994)      (1,193)
  Acquisition of a business                       (14,098)             --           --
  Proceeds from sale of equipment                      --             150           --
Net cash used in investing activities             (17,698)         (2,844)      (1,193)
Cash flows from financing activities:
  Borrowings of long-term debt                    108,450          41,448       54,400
  Repayments of long-term debt                    (84,014)        (47,475)     (59,600)
  Issuance of warrants                              1,271              --           --
  Issuance of common stock                            705             263          340
  Payment from former parent related
     to purchase price settlement                      --              --          275
Net cash provided by (used in) 
  financing activities                             26,412          (5,764)      (4,585)
Net increase (decrease) in cash and cash 
  equivalents                                         130             (57)        (548)
Cash and cash equivalents, beginning of year          732             789        1,337
Cash and cash equivalents, end of year          $     862        $    732     $    789
Supplemental disclosures of cash flow information:
  Cash paid during the year for:
     Interest                                   $   4,216        $  3,159     $  3,548
     Income taxes                                     631             383          247

The accompanying notes are an integral part of these consolidated statements.
</TABLE>      
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Amounts in thousands, except share and per share data)

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of
Rawlings Sporting Goods Company, Inc. and all of its
subsidiaries (Rawlings or the Company). All significant
intercompany transactions have been eliminated.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of short-term, highly liquid
investments with a maturity when purchased of three months or
less.

INVENTORIES

Inventories are valued at the lower of cost or net realizable
value with cost principally determined on a first-in, first-out
method. Cost includes materials, labor and overhead.

PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment is stated at cost and
depreciation is generally computed on a straight-line basis.
The principal rates of depreciation are as follows:

Buildings and improvements         20-30 years
Machinery and equipment             5-12 years
Other                               4-10 years

INCOME TAXES

Deferred income taxes are recorded for temporary differences in
reporting income and expenses for tax and financial statement
purposes in accordance with Statement of Financial Accounting
Standards No.109, Accounting for Incomes Taxes (SFAS No.109).

TRANSLATION AND HEDGING OF FOREIGN CURRENCIES

The assets and liabilities of foreign branches and subsidiaries
are translated into U.S. dollars at current exchange rates and
profit and loss accounts are translated at average annual
exchange rates. Resulting translation gains and losses are
included as a separate component in Stockholders' Equity.
Foreign exchange transaction losses of $25 and $12 were
included in the results of operations for the fiscal years
ended August 31, 1997 and 1996, respectively.

The Company utilizes forward foreign currency contracts to
minimize the impact of currency movements on anticipated
royalty payments denominated in Japanese yen. In June and
September 1998, the Company entered into forward contracts to
sell Yen 75 million and Yen 150 million Japanese yen with fixed
exchange rates and maturity dates which align with the
anticipated royalty payments in February and August 1999,
respectively.

FINANCIAL INSTRUMENTS

The fair value of the Company's financial instruments
approximates their carrying amounts. Fair value for all
financial instruments other than long-term debt, for which no
quoted market prices exist, was based on appropriate estimates.
The value of the Company's long-term debt is estimated based on
market prices for similar issues or on the current rates
offered to the Company for debt of the same remaining
maturities.

NET INCOME PER SHARE

In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard No. 128,
Earnings Per Share ("SFAS 128"), effective for financial
statements for both interim and annual periods ending after
December 15, 1997. The Company adopted the provisions of SFAS
128 during 1998, and all prior period earnings per share data
has been presented on this basis.

SEGMENT REPORTING

The Company is engaged principally in one line of business, the
manufacturing, procurement and sale of sporting goods and
related products.

RECLASSIFICATION

Certain reclassifications have been made to the prior year
financial statements to conform with the current year
presentation.

USE OF ESTIMATES

These financial statements have been prepared on the accrual
basis of accounting, which require the use of certain estimates
by management, in determining the Company's assets,
liabilities, revenues and expenses. Resolution of certain
matters could differ significantly from the resolution that is
currently expected.
<PAGE>
NOTE 2.   ACQUISITION

On September 12, 1997 the Company acquired the net assets of
the Victoriaville hockey business. The acquisition was
accounted for under the purchase method and accordingly, the
results of operations were included in the Company's
consolidated statement of income from the date of acquisition.
The purchase price, paid in cash, has been allocated to the
assets and liabilities and the excess of cost over the fair
value of net assets acquired is being amortized over a forty
year period on a straight-line basis with accumulated
amortization as of August 31, 1998 of $204. The purchase price
allocation is as follows:

          Net assets               $ 5,568
          Goodwill                   8,530

          Total purchase price     $14,098


NOTE 3.   INVENTORIES

Inventories consist of the following:

August 31,                  1998              1997

Raw materials            $ 9,552           $ 5,571
Work in process            2,497             2,027
Finished goods            31,524            22,183

Inventories              $43,573           $29,781


NOTE 4.   PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consists of the following:

August 31,                             1998              1997

Buildings and improvements         $  6,143          $  5,926
Machinery and equipment              17,598            14,350
Other                                 2,926             2,697

Total property, plant and
     equipment                       26,667            22,973
Less - Accumulated depreciation     (13,756)          (13,171)

Property, plant and equipment,
     net                           $ 12,911          $  9,802



NOTE. 5   UNUSUAL CHARGES

ENVIRONMENTAL

The Company has been conducting environmental investigation and
remediation activities at its Dolgeville, New York facility
(the "Site") with respect to the release of wood pitch into
surrounding soil and surface water. In November 1997, the
Company entered into a Voluntary Agreement with the New York
State Department of Environmental Conservation (the "NYSDEC")
to conduct certain environmental remediation activities related
to the presence of wood pitch in the soils at the Site. The
wood pitch was generated as a result of the operation, before
Rawlings' ownership of the Site, of a retort facility by a
third party unrelated to Rawlings. In December 1997, an
environmental consulting firm retained by Rawlings initiated
remediation activities under the oversight of the NYSDEC. In
conducting the remediation activities under the Voluntary
Agreement, it was discovered that the actual volume of wood
pitch substantially exceeded the amount originally estimated by
the environmental consulting firm. Some of the unanticipated,
additional wood pitch has been remediated in accordance with
the requirements of the Voluntary Agreement. The Company
believes that a portion of the unanticipated, additional volume
of wood pitch remaining at the Site may be outside the scope of
the current Voluntary Agreement. Nevertheless, the Company
expects to be required to address such additional wood pitch
through an amendment to the Voluntary Agreement. In May 1998,
the Company's environmental consultants completed an
investigation of the amount of the additional wood pitch at the
Site. Based upon the report received from the environmental
consultants and the Company's historical experience with
environmental matters at this Site, the Company recorded a $975
charge to remediate the additional unanticipated wood pitch,
which is reflected in unusual charges in the accompanying
consolidated statement of income for 1998. In the year ended
December 31, 1993, the Company recorded a charge of $1,559
which included the estimated clean up costs at this Site. The
Company's reserve for remediation costs as of August 31, 1998
was $1,082. In management's view, this amount is adequate to
cover the expected remediation activities at the wood pitch
Site.
<PAGE>
In June 1998, the Company filed an action in the Northern
District of New York against Trident Rowan Group, Inc. (Trident
Rowan), which the Company believes is the successor to the
entity which owned the wood pitch Site during the period in
which the wood pitch contamination occurred. The Company
believes that the case against Trident Rowan is strong and all
or a portion of the clean up costs associated with the wood
pitch at the Site may be recoverable. However, due to the
uncertainty associated with this matter, no receivable
associated with a potential recovery has been recorded at this
time and there can be no assurance that any amount will be
recovered.

CHANGE IN CHIEF EXECUTIVE OFFICER

In October 1997, the Company recorded a $500 charge for
severance and related benefits, legal costs and other costs
associated with changes in the Chief Executive Officer's
position. This charge has been included in unusual charges in
the accompanying consolidated statement of income. In October
1998, Stephen M. O'Hara was named Chairman and Chief Executive
Officer of Rawlings.


NOTE 6.   SUPPLEMENTAL INCOME STATEMENT INFORMATION

Set forth below is a comparative summary of certain net revenue
and expense items:

                                    1998     1997      1996
Licensing revenues                 $5,870   $6,531   $6,880
Royalty and licensing expenses      6,121    5,028    5,536
Operating lease expenses            2,184    2,300    2,426


NOTE 7.   ACCRUED LIABILITIES

Accrued liabilities consist of the following:

August 31,                                   1998      1997

Salary, benefits and other taxes           $ 4,670   $3,400
Royalties                                    1,975    2,187
Payable to former parent                     1,346    1,346
Environmental                                1,082      893
Other                                        3,474    2,075

Accrued liabilities                        $12,547   $9,901


NOTE 8.   INCOME TAXES

The income tax provision (benefit) is as follows:

                                     1998    1997      1996
Current:
     Federal                       $  724  $  472    $  564
     State and other                  117      98        67
          Total current               841     570       631

Deferred:
     Federal                        1,184   2,464     1,658
     Foreign                         (281)     --        --
     State and other                  116     178       199

          Total deferred            1,019   2,642     1,857
          Total income tax 
            provision              $1,860  $3,212    $2,488

A reconciliation between the provision for income taxes
computed at the Federal statutory rate and the rate used for
financial reporting purposes is as follows:

                         
                        1998          1997           1996
                    Amount     %   Amount     %   Amount     %

Expected provision  $1,932  35.0   $3,039  35.0   $2,716  35.0
at the statutory
rate

State and other        232   4.2      365   4.2      326   4.2
taxes, net of 
federal tax
benefit

Lower tax rates
on foreign income     (265) (4.8)    (118) (1.4)   (554)  (7.1)

Other                  (39) (0.7)     (74) (0.8)     --     --

Total income tax
provision           $1,860  33.7   $3,212  37.0   $2,488  32.1
<PAGE>
The significant components of deferred taxes which are included
in the accompanying balance sheets are as follows:




                          1998                   1997
                   Deferred     Deferred  Deferred     Deferred
                        Tax          Tax       Tax          Tax
                     Assets  Liabilities    Assets  Liabilities

Intangible assets  $22,440      $     --   $23,837     $     --
Operating loss
  carryforward         316            --       128           --
Foreign tax 
  credits              851            --     1,042           --
Receivable 
  reserve              157            --       647           --
Environmental 
  reserve              410            --       346           --
Inventory              718            --       609           --
Other accruals       1,442            --       904           --
Other                  433         1,500        --        1,227

Total              $26,767      $  1,500   $27,513     $  1,227

The Company believes a valuation allowance against deferred
income tax assets as of August 31, 1998 is not necessary. The
Company's net operating loss carryforward expires in 2013 and
the foreign tax credits expire in 2000 to 2003.  Income taxes
have not been provided on the undistributed income
(approximately $2,330) of a foreign subsidiary which the
Company does not intend to be remitted to the U.S.


NOTE 9. LONG-TERM DEBT

Long-term debt consists of the following:

August 31,                                1998     1997

Credit agreement with banks due
     2003, average interest rate
     of 6.64% and 6.78%, respectively   $56,850   $32,350

Obligation under capital lease,
     average interest rate of 4.90%         259       323

Total debt                               57,109    32,673

Less current maturities of long-
     term debt                              (61)      (59)

Total long-term debt                    $57,048   $32,614

In 1997, the Company maintained a $72,000 variable rate
unsecured credit agreement with a bank group. In September
1997, the Company amended and restated the unsecured credit
agreement with a bank group which, among other matters,
increased the facility to $90,000 and extended the maturity
date to September 1, 2002. The amended and restated credit
agreement, among other matters, requires the Company to meet
certain financial covenants including a minimum fixed charge
coverage, a required ratio of maximum total debt to total
capitalization, a minimum net worth and restrictions on the
Company's ability to pay cash dividends. In June 1998, the
Company amended the credit agreement to, among other matters,
exclude the unusual charges from the minimum fixed charge
coverage covenant. The Company is in compliance with the
amended covenants. The available borrowings under the amended
credit agreement decline $4,000, $5,000, $6,000 and $7,000 on
September 1, 1998, 1999, 2000 and 2001, respectively.

As of August 31, 1998 the Company had outstanding letters of
credit of $3,948 and available borrowing capacity of $29,202
under the credit agreement with banks.

In October 1995 the Company entered into a two-year interest
rate swap agreement with a commercial bank under which the
Company received a floating rate based on three month LIBOR
through September 1997 on $25,000 and paid a fixed rate of 6.50
percent. In October 1997, the Company entered into a two-year
interest rate swap agreement with a commercial bank under which
the Company receives a floating rate based on three month LIBOR
through October 1999 on $30,000 and pays a fixed rate of 7.00
percent. These transactions effectively convert a portion of
the Company's debt from a floating rate to a fixed rate.

The Company uses interest rate swaps, with the objective of
reducing exposure to increases in short-term interest rates, by
fixing the interest rate on a portion of its debt for a period
of time. The interest differential, to be paid or received on
an interest rate swap, is recognized as an adjustment to
interest expense as the differential occurs.
<PAGE>
NOTE 10.  OTHER LONG-TERM LIABILITIES

In July 1994, Figgie International, Inc. (the former parent)
transferred the net assets of the Rawlings business to the
Company. The assets and liabilities transferred to Rawlings
were recorded at the predecessor's cost for financial reporting
purposes. For tax purposes, the transaction results in a step-up
of the basis of the assets transferred determined by the
fair value paid by the Company for the Rawlings business. Under
the terms of a tax sharing and separation agreement between the
Company and the former parent, the Company is required to pay
the former parent 43 percent of the tax benefits resulting from
the step-up in the tax basis of the assets as the benefit of
the step-up is realized. The amount of the obligation to pay
the former parent that is not expected to be paid in the next
year is recorded as other long-term liabilities.


NOTE 11.  EMPLOYEE BENEFITS

COMPANY-SPONSORED DEFINED CONTRIBUTION PLANS

Beginning December 1, 1994, substantially all U.S. salaried
employees and certain U.S. hourly employees are covered by a
defined contribution (Section 401(k)) plan that provides
funding based on a percentage of compensation. The Company's
contributions to the plan were $327, $242 and $299 in 1998,
1997 and 1996, respectively.

MULTI-EMPLOYER PENSION PLANS

Certain union employees participate in multi-employer defined
benefit pension plans. Contributions to the plans were $194,
$201 and $186 in 1998, 1997 and 1996, respectively.


NOTE 12.  STOCK OPTIONS

The 1994 Rawlings Long-Term Incentive Plan, as amended (the
1994 Incentive Plan), provides for the issuance of up to
1,125,000 shares of Rawlings common stock upon the exercise of
stock options and stock appreciation rights, and as restricted
stock, deferred stock, stock granted as a bonus or in lieu of
other awards and other equity-based awards. The 1994 Non-Employee
Directors Stock Plan (1994 Directors Stock Plan)
provides for the issuance of up to 50,000 shares of Rawlings
common stock to non-employee directors upon the exercise of
stock options or in lieu of director's fees.

Stock options granted under the 1994 Incentive Plan and the
1994 Directors Stock Plan have exercise prices equal to the
market price on the date of grant, vest over three to four
years from the date of grant and, once vested, are generally
exercisable over ten years following the date of grant.

The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standards No.123, "Accounting
for Stock-Based Compensation."  Accordingly, no compensation
cost has been recognized for the stock option plans. Had
compensation cost for the Company's stock option plans been
determined based on the fair value at the grant date for awards
in 1998, 1997 and 1996 consistent with the provisions of this
statement, the Company's net income and net income per share
would have been as follows (in thousands, except net income per
share):

                                    1998      1997      1996
Net income                         $2,956    $4,910    $4,659
Net income per share               $ 0.38    $ 0.64    $ 0.61

The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for grants in 1998,
1997 and 1996: dividend yield of 0 percent, expected volatility
of 40.0 percent, 54.0 percent and 54.0 percent in 1998, 1997
and 1996, respectively, risk-free interest rate of 5.4 percent,
6.4 percent and 6.1 percent in 1998, 1997 and 1996,
respectively and expected life of six years.
<PAGE>
Option activity is as follows:

                           1998           1997          1996
Outstanding at 
 beginning of year        631,137       483,185        346,610
Granted                   178,000       160,378        192,125
Exercised                 (44,548)       (1,000)            --
Cancelled                (153,779)      (11,426)       (55,550)

Outstanding at end
  of year                 610,810       631,137        483,185

Shares exercisable        313,899       327,541        175,077

Price of stock 
 options:
  Granted           $11.88-$13.63  $8.31-$12.13   $7.88-$ 9.94
  Exercised         $ 9.00-$ 9.75        $ 8.00             --
  Cancelled         $ 9.00-$13.63  $9.00-$ 9.75   $9.00-$13.88
  Outstanding       $ 7.88-$13.88  $7.88-$13.88   $7.88-$13.88

At August 31, 1998, 518,642 shares of Rawlings common stock
were available for future awards under the plans.


NOTE 13.  WARRANTS

In November 1997, the Company issued warrants to purchase
925,804 shares of common stock at $12.00 per share to Bull Run
Corporation for $3.07 per warrant. The warrants expire in
November 2001 and are exercisable only if the Company's common
stock closes above $16.50 for twenty consecutive trading days.
One half of the purchase price of the warrants was paid in cash
with the other half payable with interest at 7 percent at the
time of exercise or expiration of the warrants. The receivable
for the unpaid portion of the warrants is classified as a stock
subscription receivable in the accompanying balance sheet.
These warrants are not considered common stock equivalents
until the point in time that the warrants become exercisable.


NOTE 14.  RELATED PARTY TRANSACTIONS

The Company leased office space, through December 1995, from a
partnership in which one of the Company's board of directors
had a 40 percent ownership interest. In December 1995, the
director sold his 40 percent ownership interest in the office
space. Lease payments made during the period the outside
director maintained an ownership interest in the building were
$233 in 1996.



NOTE 15.  COMMITMENTS AND CONTINGENCIES

Future minimum payments under noncancelable leases, royalty and
licensing agreements as of August 31, 1998 are as follows:

                                             Royalty and
                              Operating      Licensing
                              Leases         Agreements

          Fiscal 1999         $1,167         $ 3,697
          Fiscal 2000            917           2,974
          Fiscal 2001            283           2,681
          Fiscal 2002             80           2,383
          Fiscal 2003            --               65
          Thereafter             --              237

     Total minimum lease
       payments               $2,447         $12,037

One customer's purchases of products sold by Rawlings are 12
percent, 12 percent and 11 percent of net revenues of Rawlings
for 1998, 1997 and 1996, respectively.

In the normal course of doing business, Rawlings is subject to
various federal, state and local environmental laws. Rawlings
currently is working with the New York State Department of
Environmental Conservation in addressing contamination relating
to wood pitch located at its facility in Dolgeville, New York.
(See Note 5 Unusual Charges for additional discussion of the
Dolgeville environmental matter.)

Rawlings is periodically subjected to product liability claims
and proceedings involving its patents and other legal
proceedings; such proceedings have not had a material adverse
effect on Rawlings.

In the opinion of management, ultimate liabilities resulting
from pending environmental matters and other legal proceedings
will not have a material adverse effect on the financial
condition or results of operations of Rawlings.
<PAGE>
STOCKHOLDER INFORMATION

CORPORATE OFFICE

Rawlings Sporting Goods Company, Inc.
1859 Intertech Drive
Fenton, Missouri 63026
(314) 349-3500
Visit our website at www.rawlings.com


ANNUAL AND 10-K REPORTS

Copies of the Company's annual report on Form 10-K and
quarterly reports an Form 10-Q, as filed with the Securities
and Exchange Commission, are available free of charge upon
request. Write to:

Rawlings Sporting Goods Company, Inc.
Investor Relations
1859 Intertech Drive
Fenton, Missouri 63026


STOCK EXCHANGE LISTING

Rawlings' Common Stock is quoted on the Nasdaq National Market
System under the symbol RAWL.  As of August 31, 1998, there
were 630 shareholders of record.


COMMON STOCK             HIGH           LOW            CLOSE

1998  4th Qtr.           $16 1/2        $ 8 7/8        $ 9
      3rd Qtr.            15 5/8         11 5/8         15 3/8
      2nd Qtr.            12 1/4         10 3/8         11 7/8
      1st Qtr.            11 5/8          9 3/4         11 1/8

1997  4th Qtr.           $10 3/4        $ 7 7/8        $10 9/16
      3rd Qtr.            10 1/2          7 3/4          8 3/4
      2nd Qtr.            14 1/8          7 5/8          9
      1st Qtr.            10 3/8          7 5/8          7 7/8

The Company has paid no dividends.


STOCKHOLDER INQUIRIES

Communications concerning stockholder records, including
changes of address, should be directed to our transfer agent
and registrar:

ChaseMellon Shareholder Services
Record Keeping Services
P.O. Box 3315
South Hackensack, New Jersey 07606-1915
(888) 213-0965


Security analysts, investment professionals and stockholders
should direct their financial inquiries to:

Rawlings Sporting Goods Company, Inc.
Investor Relations
1859 Intertech Drive
Fenton, Missouri 63026
(314) 349-3500

INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP 
1010 Market Street 
St. Louis, Missouri 63101

TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services
Record Keeping Services
P.O. Box 3315
South Hackensack, New Jersey 07606-1915