UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

¨	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 2928, 2013

¨	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: 333-123927

EASTON-BELL SPORTS, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-1636283
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

7855 Haskell Avenue, Suite 200

Van Nuys, California 91406

(Address of Principal Executive Offices) (Zip Code)

(818) 902-5800

(Registrant’s Telephone Number, Including Area Code)

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 ¨ No þ.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨		Accelerated filer ¨		Non-accelerated filer þ		Smaller reporting company ¨
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ.

As of ~~August~~November 1312, 2013, 100 shares of Easton-Bell Sports, Inc. common stock were outstanding.

EXPLANATORY NOTE

The Company is a voluntary filer of reports required of companies with public securities under Sections 13 or 15(d) of the Securities Exchange Act of 1934.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

INDEX

	Page
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheets as of June 29, 2013 (unaudited) and December 29, 2012	4
Consolidated Balance Sheets as of September 28, 2013 (unaudited) and December 29, 2012	4
Consolidated Statements of Comprehensive (Loss) Income for the Fiscal Quarter and Two Fiscal Quarters Ended June 29, 2013 (unaudited) and June 30, 2012 (unaudited)	5
Consolidated Statements of Comprehensive (Loss) Income for the Fiscal Quarter and Three Fiscal Quarters Ended September 28, 2013 (unaudited) and September 29, 2012 (unaudited)	5
Consolidated Statements of Cash Flows for the Two Fiscal Quarters Ended June 29, 2013 (unaudited) and June 30, 2012 (unaudited)	6
Consolidated Statements of Cash Flows for the Three Fiscal Quarters Ended September 28, 2013 (unaudited) and September 29, 2012 (unaudited)	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3334
Item 4. Controls and Procedures	3435
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings	3536
Item 1A. Risk Factors	3536
Item 6. Exhibits	3536
SIGNATURES	3637

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

	June 29, 2013			December 29, 2012
	September 28, 2013			December 29, 2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3236,~~140~~424		$	40,852
Accounts receivable, net		~~230~~205,~~342~~667			228,201
Inventories, net		~~140~~127,~~258~~037			141,716
Prepaid expenses		75,~~279~~787			6,162
Deferred taxes, net		20,777			20,777
Other current assets		1110,~~711~~595			13,183
Total current assets		~~442~~406,~~507~~287			450,891
Property, plant and equipment, net		6366,~~736~~856			55,549
Deferred financing fees, net		87,~~635~~970			9,964
Intangible assets, net		~~261~~271,~~612~~173			265,898
Goodwill		207,739			208,697
Other assets		1,~~226~~238			1,235
Total assets	$	~~985~~961,~~455~~263		$	992,234
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Revolving credit facility	$	5515,000		$	35,000
Current portion of capital lease obligations		30			28
Accounts payable		6459,~~067~~944			78,344
Accrued expenses		6785,~~025~~508			63,848
Total current liabilities		~~186~~160,~~122~~482			177,220
Long-term debt, less current portion		347,~~522~~676			347,224
Capital lease obligations, less current portion		8—			24
Deferred taxes		5662,~~352~~952			62,626
Other noncurrent liabilities		21,~~409~~999			21,641
Total liabilities		~~611~~593,~~413~~109			608,735
Stockholder’s equity:
Common stock: $0.01 par value, 100 shares authorized, 100 shares issued and outstanding at June 29, 2013 and December 29, 2012		—			—
Common stock: $0.01 par value, 100 shares authorized, 100 shares issued and outstanding at September 28, 2013 and December 29, 2012		—			—
Additional paid-in capital		~~373~~375,~~945~~559			368,778
Retained earnings		2,548			13,624
(Accumulated deficit) retained earnings		(6,138	)		13,624
Accumulated other comprehensive (loss) income		(21,~~451~~267	)		1,097
Total stockholder’s equity		~~374~~368,~~042~~154			383,499
Total liabilities and stockholder’s equity	$	~~985~~961,~~455~~263		$	992,234

See accompanying notes to consolidated financial statements.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited and amounts in thousands)

Fiscal Quarter Ended

~~Two~~Three Fiscal Quarters Ended

June 29, 2013

June 30, 2012

June 29, 2013

June 30, 2012

September 28, 2013

September 29, 2012

September 28, 2013

September 29, 2012

Net sales

~~201~~199,~~581~~421

~~214~~213,~~067~~329

~~409~~608,~~193~~614

~~430~~643,~~348~~677

Cost of sales

129,~~709~~448

~~139~~137,~~232~~076

~~263~~393,~~823~~271

~~282~~419,~~339~~415

Gross profit

7169,~~872~~973

7476,~~835~~253

~~145~~215,~~370~~343

~~148~~224,~~009~~262

Selling, general and administrative expenses

6357,~~735~~696

5556,~~304~~354

~~127~~185,~~916~~612

~~112~~168,~~444~~798

Amortization of intangibles

1,~~815~~816

2,597

46,~~286~~102

57,~~194~~791

Income from operations

610,~~322~~461

1617,~~934~~302

1323,~~168~~629

3047,~~371~~673

Interest expense, net

1011,~~534~~234

1011,~~500~~112

2132,~~245~~479

2132,~~123~~235

(Loss) income before income taxes

(~~4,212~~773

)

6,~~434~~190

(8,~~077~~850

)

915,~~248~~438

Income tax (benefit) expense

(4,297

)

2,726

(6,099

)

4,190

Income tax expense

7,913

2,531

1,814

6,721

Net income (loss)

3,708

(1,978

)

5,058

Net (loss) income

(8,686

)

3,659

(10,664

)

8,717

Other comprehensive (loss) income:

Foreign currency translation adjustment

(21,~~025~~184

)

(12,~~323~~593

)

(32,~~548~~364

)

(1,~~528~~065

)

Comprehensive (loss) income

(17,~~940~~502

)

26,~~385~~252

(513,~~526~~028

)

39,~~530~~782

See accompanying notes to consolidated financial statements.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and amounts in thousands)

	Two Fiscal Quarters Ended
	Three Fiscal Quarters Ended
	June 29, 2013			June 30, 2012
	September 28, 2013			September 29, 2012
Cash flows from operating activities:
Net (loss) income	$	(110,~~978~~664	)	$	58,~~058~~717
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		1421,~~855~~845			1523,~~765~~786
Amortization of deferred financing fees and debt discount		12,~~627~~446			12,~~599~~405
Equity compensation expense		56,~~167~~781			1,~~333~~963
Deferred income taxes		~~(6,274~~326	)		12,~~310~~177
Non-cash impairment charges		958			—
Disposal of property, plant and equipment		~~233~~279			—
Changes in operating assets and liabilities, net of effects from purchase of business:
Accounts receivable, net		(222,~~134~~516	)		117,~~291~~012
Inventories, net		114,~~411~~699			(62,~~253~~543	)
Other current and noncurrent assets		~~364~~2,960			35,~~283~~140
Accounts payable		(1418,~~266~~418	)		(1620,~~642~~705	)
Accrued expenses		318,~~161~~943			(48,~~078~~547	)
Other noncurrent liabilities		~~(232~~358	)		~~519~~910
Net cash provided by operating activities		263,~~892~~029			347,~~185~~409
Cash flows from investing activities:
Purchase of property, plant and equipment		(1927,~~046~~388	)		(1116,~~659~~603	)
Purchase of business, net of cash acquired		—			(1,150	)
Net cash used in investing activities		(19,046	)		(12,809	)
Purchase of intellectual property		(8,662	)		(2,500	)
Net cash used in investing activities		(36,050	)		(20,253	)
Cash flows from financing activities:
Proceeds from revolving credit facility		4348,000			32,000
Payments on revolving credit facility		(2368,000	)		(2354,000	)
Payments on capital lease obligations		(1422	)		(1320	)
Distribution to RBG		(9,098	)		—
Net cash provided by financing activities		10,888			8,987
Net cash used in financing activities		(29,120	)		(22,020	)
Effect of exchange rate changes on cash and cash equivalents		(32,~~446~~287	)		(1,~~256~~141	)
Net change in cash and cash equivalents		(84,~~712~~428	)		(16,~~893~~277	)
Cash and cash equivalents, beginning of period		40,852			29,505
Cash and cash equivalents, end of period	$	3236,~~140~~424		$	2735,~~612~~782

See accompanying notes to consolidated financial statements.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited and amounts in thousands, except as specified)

(Unaudited and amounts in thousands, except as specified)

1. Basis of Presentation

Easton-Bell Sports, Inc. is a wholly-owned subsidiary of RBG Holdings Corp., or RBG, which, in turn, is a wholly-owned subsidiary of EB Sports Corp., or EB Sports, of which 100% of the issued and outstanding voting common stock is owned by Easton-Bell Sports, LLC, the ultimate parent company, or our Parent. Unless otherwise indicated, all references in this Form 10-Q to Easton-Bell, we, us, our, and the Company refer to Easton-Bell Sports, Inc. and its consolidated subsidiaries. References to Easton, Bell and Riddell refer to Easton Sports, Inc. and its consolidated subsidiaries, Bell Sports Corp. and its consolidated subsidiaries and Riddell Sports Group, Inc. and its consolidated subsidiaries, respectively.

The accompanying unaudited consolidated financial statements included herein have been prepared by our Company in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and the rules and regulations of the Securities and Exchange Commission or the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, normal recurring adjustments considered necessary for a fair presentation have been reflected in these consolidated financial statements. These unaudited consolidated financial statements should be read in conjunction with our Company’s audited financial statements and notes thereto included in our Company’s Annual Report on Form 10-K for the year ended December 29, 2012 filed on March 28, 2013. Our Company has two reportable segments, Team Sports and Action Sports and is subject to seasonal fluctuation, based on the sports season for the equipment that we supply to our customers. Results for interim periods are not necessarily indicative of the results for the year.

Certain amounts in the December 29, 2012 consolidated financial statements have been reclassified for comparative purposes to conform to the presentation in the ~~June~~September 2928, 2013 consolidated financial statements. These reclassifications have no effect on the previously reported income (loss).

Our Company’s fiscal quarters are 13-week periods ending on Saturdays. As a result, our Company’s ~~second~~third quarter of fiscal year 2013 ended on ~~June~~September 2928, and the ~~second~~third quarter of fiscal year 2012 ended on ~~June~~September 3029.

2. Goodwill and Other Intangible Assets

Goodwill and other indefinite-lived intangible assets are tested for impairment at each of our Company’s segments on an annual basis in December, and more often if indications of impairment exist as required under the Financial Accounting Standards Board, or the FASB’s, Accounting Standards Codification 350-20 Goodwill. The results of our Company’s analyses conducted in 2012 indicated that no impairment in the carrying amount of goodwill and other indefinite-lived intangible assets had occurred.

In June 2013, our Company made the decision to discontinue selling lacrosse equipment. This decision resulted in the write-off of $958 of goodwill directly associated with lacrosse. We do not consider sales of lacrosse equipment to be a significant activity of our Company. During the first ~~two~~three fiscal quarters of 2013, there were no other indicators of impairment to goodwill and intangible assets.

In August 2013, Bell acquired an entity whose principal asset was a license to distribute certain Bell products throughout the world (excluding USA, Mexico and Canada). As a result, the carrying amount of indefinite-lived intangible assets related to our Action Sports segment increased by $11,377, of which $8,662 was paid in cash.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

Goodwill by segment is as follows:

	Team Sports		Action Sports		Consolidated
Balance as of June 29, 2013	$	145,368	$	62,371	$	207,739
Balance as of September 28, 2013	$	145,368	$	62,371	$	207,739

Acquired intangible assets are as follows:

	June 29, 2013					December 29, 2012
	September 28, 2013					December 29, 2012
	Gross Carrying Amounts		Accumulated Amortization			Gross Carrying Amounts		Accumulated Amortization
Amortized intangible assets:
Trademarks and tradenames	$	1,702	$	(1,702	)	$	1,702	$	(1,702	)
Customer relationships		62,514		(4344,~~776~~719	)		62,514		(41,893	)
Patents		60,345		(5152,~~422~~241	)		60,345		(49,130	)
Licensing and other		7,043		(6,~~256~~310	)		7,043		(6,145	)
Total	$	131,604	$	(~~103~~104,~~156~~972	)	$	131,604	$	(98,870	)
Indefinite-lived intangible assets:
Trademarks and tradenames	$	233,164				$	233,164
Trademarks, tradenames and other	$	244,541				$	233,164

3. Long-Term Debt

Long-term debt consisted of the following:

	June 29, 2013			December 29, 2012
	September 28, 2013			December 29, 2012
9.750% Senior Secured Notes	$	350,000		$	350,000
Senior Secured Credit ABL Facility		5515,000			35,000
Capital lease obligations		3830			52
Total debt		~~405~~365,~~038~~030			385,052
Less unamortized debt discount on senior secured notes		(2,~~478~~324	)		(2,776	)
Less Senior Secured Credit ABL Facility and capital lease obligations		(5515,~~038~~030	)		(35,052	)
Long-term debt, less current portion	$	347,~~522~~676		$	347,224

9.750% Senior Secured Notes

In December 2009, in connection with the refinancing of our Company’s then existing indebtedness, or the Refinancing, we issued $350,000 of 9.750% Senior Secured Notes, due December 2016, or the Notes. Interest is payable on the Notes semi-annually on June 1 and December 1 of each year. We may redeem all or any of the Notes prior to December 1, 2013 at 107.313% of the principal amount of the Notes, plus accrued and unpaid interest. Then we may redeem all or any of the Notes on or after December 1, 2013 and prior to December 1, 2014 at 104.875% of the principal amount of the Notes, plus accrued and unpaid interest. Then we may redeem all or any of the Notes on or after December 1, 2014 and prior to December 1, 2015 at 102.438% of the principal amount of the Notes, plus accrued and unpaid interest. At any time on or after December 1, 2015, our Company may redeem all or any of the Notes at 100.00% of the principal amount of the Notes, plus accrued and unpaid interest. We are not required to make mandatory redemption or sinking fund payments with respect to the Notes. However, the Notes will become due and payable on October 1, 2015 unless on or prior to August 28, 2015, the indebtedness of EB Sports under its senior secured credit agreement with Wachovia Bank, N.A. and the lenders party thereto, or the New Holdco Facility (described herein below), has been either repaid or refinanced with indebtedness with a stated maturity that is at least 91 days after the maturity date of the Notes.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

Among other provisions, the indenture governing the Notes contains certain restrictions that limit our Company’s ability to (1) incur, assume or guarantee additional debt, (2) pay dividends and make other restricted payments, (3) create liens, (4) sell assets and subsidiary stock, (5) enter into sale and leaseback transactions, (6) enter into agreements that restrict dividends from subsidiaries, (7) change our business, (8) enter into transactions with affiliates and (9) transfer all or substantially all of our assets or enter into merger or consolidation transactions. The indenture governing the Notes also requires us to make an offer to repurchase the Notes at 101.00% of the principal amount following a change of control of our Company, and subject to customary reinvestment rights, at 100.00% of the principal amount with the proceeds of certain sales of assets and subsidiary stock.

Subject to certain exceptions, the indenture governing the Notes permits our Company and our restricted subsidiaries to incur additional indebtedness, including senior indebtedness and secured indebtedness. In addition, the indenture does not limit the amount of indebtedness that our direct or indirect parent entities, including EB Sports and RBG, may incur.

The ABL Facility

Concurrently with the issuance of the Notes on December 3, 2009, our Company, together with certain of our subsidiaries as Canadian Borrowers (as defined therein) or Guarantors (as defined therein), entered into a senior secured asset based revolving credit facility with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the other agents party thereto and the lenders party thereto, or the ABL Facility, under which our Company and the Canadian Borrowers may borrow, subject to availability under each of a United States and Canadian borrowing base, up to $250,000 (of which up to $30,000 may be borrowed by the Canadian Borrowers) which amount, subject to certain conditions, may be increased to allow borrowings of up to $300,000. The unused portion of the ABL Facility (subject to borrowing base availability) is to be drawn from time to time for general corporate purposes (including permitted acquisitions) and working capital needs. At ~~June~~September 2928, 2013, we had $5515,000 outstanding under the ABL facility and $~~158~~167,~~890~~212 of additional availability.

Certain of our Company’s wholly-owned domestic subsidiaries, and all subsidiaries that guarantee the Notes (currently only our wholly-owned domestic subsidiaries) guarantee all of our obligations (both United States and Canadian) under the ABL Facility. In addition, our wholly-owned Canadian subsidiaries guarantee the obligations of the Canadian borrowings under the Canadian sub-facility of the ABL Facility. Furthermore, we and our wholly-owned domestic subsidiaries, subject to certain exceptions, grant security with respect to substantially all of our personal property as collateral for our obligations (and related guarantees) under the ABL Facility, including a first-priority security interest in cash and cash equivalents, lockbox and deposit accounts, accounts receivable, inventory, other personal property relating to such inventory and accounts receivable and all proceeds therefrom and a second-priority security interest in substantially all of our equipment and all other assets that secure the Notes on a first-priority basis. The obligations of our Canadian subsidiaries that are borrowers under the Canadian sub-facility of the ABL Facility are secured, subject to certain exceptions and permitted liens, on a first-priority lien basis, by substantially all of the assets of our wholly-owned Canadian subsidiaries and by our and our domestic subsidiaries’ assets on the same basis as borrowings under the ABL Facility. At ~~June~~September 2928, 2013, we had a zero balance outstanding under the Canadian sub-facility of the ABL Facility.

On May 13, 2011, our Company entered into an Amendment and Restatement Agreement, or the Amendment, among our Company, the Canadian Borrowers, the subsidiary guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as collateral agent and administrative agent and the other agents party thereto, which amended the ABL Facility. The Amendment, among other things, reduced the interest rate applicable to loans made under the ABL Facility and amended certain covenants thereunder applicable to our Company and our subsidiaries. In addition, the Amendment extended the maturity date of loans under the ABL Facility from December 3, 2013 to May 13, 2016; provided that if the Credit and Guaranty Agreement, dated as of December 3, 2009 among EB Sports Corp., as borrower, RBG Holdings Corp., as guarantor, Wachovia Bank, N.A., as administrative agent and collateral agent and the lenders from time to time party thereto has not been repaid or refinanced prior to July 1, 2015 with a new credit agreement that meets certain criteria set forth in the ABL Facility, the loans under the ABL Facility will mature on July 1, 2015.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

The interest rates per annum applicable to the loans under the ABL Facility, other than swingline loans and protective advances, equal an applicable margin percentage plus, at our option, (1) in the case of U.S. dollar denominated loans, a U.S. base rate or LIBOR, and (2) in the case of Canadian dollar denominated loans, a Canadian base rate or CDOR. Swingline loans and protective advances bear interest at the U.S. base rate for U.S. dollar denominated loans and the Canadian base rate for Canadian dollar denominated loans, in each case, plus an applicable margin (and plus an additional 2.0% in the case of protective advances). The applicable margin percentage for the ABL Facility, as amended by the Amendment, ranges between 1.5% and 2.5% for LIBOR or CDOR and 0.5% and 1.5% for the base rate, based upon our total leverage ratio as calculated under the ABL Facility. In addition to paying interest on outstanding principal under the ABL Facility, we are required to pay a commitment fee, in relation to the unutilized commitments, which ranges from 0.375% to 0.5% based upon our utilization of the ABL Facility (increasing when utilization is lower and decreasing when utilization is higher). We are also required to pay customary letter of credit fees.

The ABL Facility requires that if excess gross availability is less than the greater of a specified percentage of the gross borrowing base and a specified dollar amount, we must comply with a minimum fixed charge coverage ratio test. In addition, the ABL Facility includes negative covenants that, subject to certain exceptions, limit our ability and the ability of our subsidiaries, to, among other things (1) incur additional debt, (2) create liens, (3) transfer all or substantially all of our assets or enter into merger or consolidation transactions, (4) change our business, (5) make investments, loans, advances, guarantees and acquisitions, (6) transfer or sell assets, (7) enter into sale and leaseback transactions, (8) enter into swap agreements, (9) make restricted payments, (10) enter into transactions with affiliates and (11) enter into agreements that restrict dividends from subsidiaries.

Holdco Facility Obligations

On December 3, 2009, EB Sports refinanced its previous senior unsecured credit agreement with Wachovia Investment Holdings, LLC and the lenders named therein pursuant to which EB Sports had borrowed $175,000, or the Previous Holdco Facility, through (1) a new senior secured credit agreement, or the New Holdco Facility, with Wachovia Investment Holdings, LLC and the existing lenders under the Previous Holdco Facility, (2) an equity investment from Fenway Easton-Bell Sports Holding, LLC and Fenway Partners Capital Fund III, L.P., or together the Fenway Investors, each an affiliate of Fenway Partners, LLC and certain existing investors of Parent and EB Sports and their respective affiliates of $1,725 in cash in exchange for Class C Common Units of our Parent (of which, $1,466 was contributed by Parent to EB Sports) and (3) an equity investment from the Fenway Investors and certain existing investors of EB Sports and their respective affiliates of $113,275 in cash in exchange for new non-voting (other than rights to designate one director of EB Sports), non-redeemable Series A Preferred Stock of EB Sports, or the Series A Preferred Stock. The Series A Preferred Stock accrues dividends quarterly at a rate of 17.5% per annum. In addition to the $13,200 invested by existing investors of Parent, their respective affiliates and certain other investors in August 2009, the issuance of new shares of Series A Preferred Stock on December 3, 2009 resulted in an aggregate of $126,475 invested in Series A Preferred Stock immediately after giving effect to the financing.

Under the terms of the refinancing transaction, the net proceeds from the equity issuance were used to repurchase loans under the Previous Holdco Facility at a price of 90% of the principal amount thereof, and the consenting lenders whose loans were repurchased exchanged their remaining principal and accrued interest into a new facility with a maturity date of December 31, 2015. The Previous Holdco Facility has been terminated. At closing, EB Sports had borrowed $108,268 under the New Holdco Facility. Borrowings under the New Holdco Facility bear interest at 11.5% per annum, such interest to be paid in cash; provided, that prior to maturity if EB Sports does not have sufficient cash on hand and Easton-Bell is either prohibited from distributing sufficient cash to EB Sports to make such interest payments or does not have sufficient liquidity (in the reasonable determination of Easton-Bell management) to permit Easton-Bell to distribute cash in an amount sufficient to allow such payment, EB Sports will pay cash to the extent it is able to do so using cash on hand after giving effect to permitted and available distributions, and the remainder of the interest due shall be added to the principal amount of the loan at a rate of 13.5% per annum for the then ending interest period. In May 2013, our Company distributed $8,178 to RBG, to enable EB Sports to pay interest on the New Holdco Facility.

Borrowings under the New Holdco Facility are not guaranteed by us or any of our subsidiaries and are senior unsecured obligations of EB Sports. However, given that EB Sports controls our Company’s direct parent, EB Sports has the ability, subject to the terms of the ABL Facility, the Notes and any other agreements which limit our ability to declare and pay dividends, to obtain money from us and our subsidiaries ~~in order~~ to fund its obligations under such loan.

At ~~June~~September 2928, 2013, the amount of loans issued under the New Holdco Facility was $~~144~~149,~~958~~093 including accrued interest.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

Other

Our Company has arrangements with various banks to issue standby letters of credit or similar instruments, which guarantee our obligations for the purchase of certain inventories and for potential claims exposure for insurance coverage. At ~~June~~September 2928, 2013 and December 29, 2012, outstanding letters of credit issued under the revolving credit facilities for both periods totaled $3,256. The amount of unused lines of credit at ~~June~~September 2928, 2013 and December 29, 2012, were $~~158~~167,~~890~~212 and $181,061, respectively.

Cash payments for interest were $181,~~621~~783 and $181,~~592~~664 for the fiscal quarters ended ~~June~~September 2928, 2013 and ~~June~~September 3029, 2012, respectively. For the first ~~two~~three fiscal quarters of 2013 and 2012, cash payments for interest were $1921,~~854~~637 and $1921,~~768~~432, respectively. WeOur Company amortized $~~664~~665 of debt issuance costs during the ~~second~~third fiscal quarters of 2013 and 2012, respectively. For the first ~~two~~three fiscal quarters of 2013 and 2012, we amortized $1,~~329~~994 of debt issuance costs for both periods.

4. Accrued Expenses

Accrued expenses consist of the following:

	June 29, 2013		December 29, 2012
	September 28, 2013		December 29, 2012
Salaries, wages, commissions and bonuses	$	16,979	$	12,815
Salaries, wages, commissions, bonuses and severance	$	25,415	$	13,220
Product liability—current portion		5,709		5,017
Interest		11,689		2,899
Rebates		5,274		5,919
Product liability—current portion		6,152		5,017
Legal		5,003		9,057
Income taxes		6,125		2,983
Advertising		4,917		6,211
Rebates		5,558		5,919
Interest		3,074		2,899
Advertising		5,507		6,211
Warranty		2,974		2,889
Legal		4,912		9,057
Income taxes		2,619		2,983
Warranty		3,065		2,889
Other		2017,~~476~~085		1615,~~058~~653
Total accrued expenses	$	6785,~~025~~508	$	63,848

5. Inventories

Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or market and include material, labor and factory overhead for manufactured products and freight and duty for purchased finished goods.

Inventories consisted of the following:

	June 29, 2013		December 29, 2012
	September 28, 2013		December 29, 2012
Raw materials	$	2621,~~342~~906	$	27,275
Work-in-process		2,~~795~~201		3,710
Finished goods		~~111~~102,~~121~~930		110,731
Inventories, net	$	~~140~~127,~~258~~037	$	141,716

6. Recent Accounting Pronouncements

In February 2013, the FASB issued a new standard that requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component for those items reclassified to net income in their entirety in the same reporting period. For other amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about those amounts. The new standard is effective for fiscal years beginning after December 15, 2012. The provisions of this standard did not have a material impact on our Company’s consolidated financial statements.

In July 2013, the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. Our Company intends to adopt this guidance at the beginning of the first quarter of fiscal year 2014, and is currently evaluating the impact on our Company’s consolidated financial statements and disclosures.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

7. Segment Reporting

Our Company has two reportable segments: Team Sports and Action Sports. Our Team Sports segment primarily consists of football, baseball, softball, ice hockey and other team sports products and reconditioning services related to certain of these products. Our Action Sports segment primarily consists of helmets, equipment, components and accessories for cycling, snowsports and powersports. Our Company evaluates segment performance primarily based on income from operations excluding equity compensation expenses, management expenses, restructuring and other infrequent expenses, amortization of intangibles and corporate expenses. ~~Our selling~~Selling, general and administrative expenses, excluding corporate expenses, are charged to each segment based on where the expenses are incurred. Segment income from operations as presented by our Company may not be comparable to similarly titled measures used by other companies. As a result, the components of income from operations for one segment may not be comparable to another segment.

Segment results for the fiscal quarter and ~~two~~three fiscal quarters ended ~~June~~September 2928, 2013 and ~~June~~September 3029, 2012, respectively, are as follows:

Fiscal Quarter Ended	Team Sports		Action Sports		Consolidated
June 29, 2013
September 28, 2013
Net sales	$	~~111~~116,~~987~~679	$	8982,~~594~~742	$	~~201~~199,~~581~~421
Income from operations		1118,~~311~~881		124,~~539~~362		23,~~850~~243
Depreciation		32,~~164~~937		2,~~175~~237		5,~~339~~174
Capital expenditures		74,~~669~~579		63,~~221~~763		138,~~890~~342
June 30, 2012
September 29, 2012
Net sales	$	123,~~556~~929	$	9089,~~511~~400	$	~~214~~213,~~067~~329
Income from operations		1520,~~654~~158		1311,~~602~~114		2931,~~256~~272
Depreciation		3,~~292~~221		12,~~965~~203		5,~~257~~424
Capital expenditures		32,~~526~~649		2,~~540~~295		64,~~066~~944
Two Fiscal Quarters Ended	Team Sports		Action Sports		Consolidated
June 29, 2013
Net sales	$	236,269	$	172,924	$	409,193
Income from operations		26,068		24,012		50,080
Depreciation		6,209		4,360		10,569
Capital expenditures		10,637		8,409		19,046
June 30, 2012
Net sales	$	247,968	$	182,380	$	430,348
Income from operations		27,550		28,292		55,842
Depreciation		6,509		4,062		10,571
Capital expenditures		6,546		5,113		11,659

	Team Sports		Action Sports		Consolidated
Three Fiscal Quarters Ended	Team Sports		Action Sports		Consolidated
Assets
September 28, 2013
As of June 29, 2013	$	626,519	$	358,936	$	985,455
Net sales	$	352,948	$	255,666	$	608,614
As of December 29, 2012		649,692		342,542		992,234
Income from operations		44,949		28,374		73,323
Depreciation		9,146		6,597		15,743
Capital expenditures		15,216		12,172		27,388
September 29, 2012
Net sales	$	371,897	$	271,780	$	643,677
Income from operations		47,708		39,406		87,114
Depreciation		9,730		6,265		15,995
Capital expenditures		9,195		7,408		16,603

	Team Sports		Action Sports		Consolidated
Assets
As of September 28, 2013	$	606,392	$	354,871	$	961,263
As of December 29, 2012		649,692		342,542		992,234

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

A reconciliation from the segment information to the Consolidated Statements of Comprehensive (Loss) Income is set forth below:

Fiscal Quarter Ended

~~Two~~Three Fiscal Quarters Ended

June 29, 2013

June 30, 2012

June 29, 2013

June 30, 2012

September 28, 2013

September 29, 2012

September 28, 2013

September 29, 2012

Segment income from operations

23,~~850~~243

2931,~~256~~272

5073,~~080~~323

5587,~~842~~114

Equity compensation expense

(41,~~739~~614

)

(~~729~~630

)

(56,~~167~~781

)

(1,~~333~~963

)

Corporate expenses

(109,~~974~~352

)

(810,~~996~~743

)

(2736,~~459~~811

)

(1829,~~944~~687

)

Amortization of intangibles

(1,~~815~~816

)

(2,597

)

(46,~~286~~102

)

(57,~~194~~791

)

Consolidated income from operations

610,~~322~~461

1617,~~934~~302

1323,~~168~~629

3047,~~371~~673

8. Product Liability, Litigation and Other Contingencies

Product Liability

Our Company is subject to various product liability claims and/or suits brought against us for claims involving damages for personal injuries or deaths. Allegedly, these injuries or deaths relate to the use by claimants of products manufactured by our Company and, in certain cases, products manufactured by others. The ultimate outcome of these claims, or potential future claims, cannot be determined. Our management obtains an actuarial analysis and has established an accrual for probable losses based on this analysis, which considers, among other factors, our previous claims history and available information on alleged claims. However, due to the uncertainty involved with estimates, actual results could vary substantially from those estimates.

In the opinion of management, amounts accrued for exposures relating to product liability claims and other legal proceedings are adequate and, accordingly, the ultimate resolution of these matters is not expected to have a material adverse effect on our Company’s consolidated financial statements. As of ~~June~~September 2928, 2013, our Company had no known probable but inestimable exposures relating to product liability or other legal proceedings that are expected to have a material adverse effect on our Company.

There can be no assurance, however, that unanticipated events will not require our Company to increase the amount it has accrued for any matter or accrue for a matter that has not been previously accrued because it was not considered probable.

Certain of our entities are named in fifty-six suits by groups of retired NFL players. ~~We believe these complaints are without merit and we are vigorously defending against them.~~ These cases are at preliminary stages, and we are unable to predict outcomes, or reasonably estimate a range of possible losses, if any. InWhile the ~~event~~claims ~~that we~~ are ~~determined~~complex toand ~~have~~the ~~any~~alleged ~~liability~~injury inoccurrences ~~these~~span ~~matters~~several years, we believe ~~that~~these ~~the~~complaints ~~insurance~~are ~~policies~~without ~~that~~merit weand ~~had in place during the time periods covered by the allegations will adequately cover any liability. The claims~~ are ~~complex~~vigorously ~~and~~defending ~~the~~against ~~alleged injury occurrences span several years~~them. Further, ~~During~~during the time period of the factual allegations, wethe entity had product liability insurance from numerous carriers. Through insurance coverage counsel, we ~~are~~have ~~aggressively~~been ~~identifying~~able to identify policies, ~~putting~~put carriers on notice and ~~pursuing~~pursue coverage claims. ~~coverage~~We ~~with~~anticipate ~~many~~that the insurance ~~carriers.~~policies ~~With~~that ~~some~~were ~~carriers,~~in weplace ~~have~~during ~~initiated~~the ~~litigation~~time ~~aimed~~periods atcovered ~~establishing~~by ~~carrier~~the ~~obligations~~allegations towill ~~pay~~afford adequate coverage for defense costs. Weduring ~~expect~~the ~~that~~course weof ~~will~~the belitigation ~~afforded~~and, ~~adequate~~in ~~coverage~~the ~~for~~event ~~defense~~that ~~costs~~we ~~and~~are determined to have any liability in these matters, ifwill adequately cover any liability.

Our Company maintains product liability insurance coverage under various policies. These policies provide coverage against claims resulting from alleged injuries sustained during the respective policy periods, subject to policy terms and conditions. The primary portion and three additional excess layers of our Company’s product liability coverage are written under policies expiring in January 2014.

Litigation and Other Contingencies

Our Company is also involved in various non-product liability claims and actions, including employment related matters as well as claims relating to potential infringement of intellectual property rights of others. We do not believe that any resulting damage awards will have a material adverse effect on our financial results. In 2002, one of our competitors sued us in Canadian Federal Court alleging infringement of a hockey skate patent. The details of such lawsuit have been previously disclosed in prior Company filings. On June 10, 2013, we settled the lawsuit.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

9. Income Taxes

Our Company recorded an income tax ~~benefit~~expense of $61,~~099~~814 and ~~income tax expense of~~ $46,~~190~~721 for the first ~~two~~three fiscal quarters of 2013 and 2012, respectively. Our Company’s effective tax rate was 75(20.5% ) for the first ~~two~~three fiscal quarters of 2013, as compared to 4543.35% for the first ~~two~~three fiscal quarters of 2012. For the first ~~two~~three fiscal quarters of 2013, the difference between the effective rate and the statutory rate is primarily attributable to the permanent difference for equity compensation expense, foreign income taxes, state income taxes and ~~meals~~changes ~~and~~to ~~entertainment~~the ~~expenses~~valuation allowance. For the first ~~two~~three fiscal quarters of 2012, the difference between the effective rate and the statutory rate is primarily attributable to the permanent difference for equity compensation expense, state income taxes, meals and entertainment expenses and unrecognized tax benefits.

10. Derivative Instruments and Hedging Activity

Our Company accounts for all derivatives on the balance sheet as an asset or liability measured at fair value and changes in fair values are recognized in earnings unless specific hedge accounting criteria are met for cash flow or net investment hedges. If such hedge accounting criteria are met, the change is deferred in stockholder’s equity as a component of accumulated other comprehensive (loss) income. The deferred items are recognized in the period the derivative contract is settled. As of ~~June~~September 2928, 2013, we had not designated any of our derivative instruments as hedges, and therefore, have recorded the changes in fair value in the Consolidated Statements of Comprehensive (Loss) Income.

Our Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, our Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value.

Our Company has foreign currency exchange forward contracts in place to reduce our risk related to inventory purchases. These contracts are not designated as hedges, and therefore, under current accounting standards are recorded at fair value in the current portion of other liabilities in the accompanying Consolidated Balance Sheets with the corresponding change charged or credited to selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive (Loss) Income.

The foreign currency exchange forward contracts in aggregated notional amounts in place to exchange United States Dollars at ~~June~~September 2928, 2013 and December 29, 2012 were as follows:

June 29, 2013

December 29, 2012

September 28, 2013

December 29, 2012

U.S. Dollars

Foreign Currency

U.S. Dollars

Foreign Currency

Foreign Currency Exchange Forward Contracts:

U.S. Dollars / Canadian Dollars

~~2,083~~533

Cdn$

~~2,058~~527

11,303

Cdn$

11,193

U.S. Dollars / Mexican Pesos

~~1,121~~262

Mxn$

153,~~002~~512

3,760

Mxn$

50,018

As of ~~June~~September 2928, 2013, the fair value of the foreign currency exchange forward contracts, using Level 2 inputs from third party banks, represented assets of $~~129~~22 and $304 for Canadian Dollar and Mexican Peso contracts, respectively. Changes in the fair value of the foreign currency exchange contracts are reflected in selling, general and administrative expenses each period.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

The assets and liabilities measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820 at ~~June~~September 2928, 2013, were as follows:

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Foreign currency exchange forward contracts	$	—	$	~~159~~26	$	—
Liabilities:
None	$	—	$	—	$	—

Fair Value of Financial Instruments

The carrying amounts reported in our Company’s Consolidated Balance Sheets for “Cash and cash equivalents,” “Accounts receivable, net” and “Accounts payable” approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value amount of long-term debt under our Company’s 9.75% Notes are based on quoted market prices for the same or similar issues on borrowing rates available to our Company for loans with similar terms and average maturities.

The estimated fair values of the Company’s long-term debt including accrued interest were as follows:

June 29, 2013

December 29, 2012

September 28, 2013

December 29, 2012

Carrying Amount

Fair Value

Carrying Amount

Fair Value

Financial liability:

9.75% Senior Secured Notes

~~350~~359,~~461~~241

~~377~~382,~~894~~565

349,973

379,034

11. Accumulated Other Comprehensive (Loss) Income

The following is a reconciliation of the change in accumulated other comprehensive (loss) income for the ~~two~~three fiscal quarters of 2013:

	Foreign Currency
Balance at December 29, 2012	$	1,097
Other comprehensive loss		(1,523	)
Balance at March 30, 2013		(426	)
Other comprehensive loss		(2,025	)
Balance at June 29, 2013	$	(2,451	)
Other comprehensive income		1,184
Balance at September 28, 2013	$	(1,267	)

12. Equity-Based Employee Compensation

Cash Incentive Plan

On December 14, 2012, our Company adopted the Easton-Bell Sports, Inc. 2012 Cash Incentive Plan, or the CIP. Certain members of management, members of the board of directors, consultants and representatives of our Company, subsidiaries and the Parent are eligible to participate in the CIP. Payments from the CIP take place upon the occurrence of a qualified liquidity event, which include a change of control, partial sale, initial public offering or refinancing. Participants in the CIP receive various payments upon such events depending on the number of units held by that participant, type of event and total enterprise value of our Company at such time. The maximum number of units available and currently outstanding under the CIP is 21,200. The aggregate proceeds available to the holders of CIP units are determined by the type of qualified liquidity event and whether certain total enterprise value thresholds are reached. The maximum aggregate proceeds available for CIP payments is $27,723.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

12To receive units under the CIP, each prospective participant had to return to our Company any outstanding Class B Common units that were previously issued to such prospective participant pursuant to the Parent’s equity incentive plan. ~~Equity~~All units granted under the CIP will vest upon a qualified liquidity event that occurs prior to the seven-~~Based~~year ~~Employee~~anniversary ~~Compensation~~of the effective date of the CIP. The vesting of all or any portion of the participants’ units may be accelerated at any time at the sole discretion of the board of directors of our Company. As of September 28, 2013, we have not recognized any compensation expense for the CIP as the occurrence of a qualified liquidity event is currently deemed to be improbable. As conditions change, we will assess the probability and record any such compensation costs deemed necessary in accordance with applicable accounting standards.

Cash Incentive Plan

To receive units under the CIP, each prospective participant had to return to our Company any outstanding Class B Common units that were previously issued to such prospective participant pursuant to the Parent’s equity incentive plan. All units granted under the CIP will vest upon a qualified liquidity event that occurs prior to the seven-year anniversary of the effective date of the CIP. The vesting of all or any portion of the participants’ units may be accelerated at any time at the sole discretion of the board of directors of our Company. As of June 29, 2013, we have not recognized any compensation expense for the CIP as the occurrence of a qualified liquidity event is currently deemed to be improbable. As conditions change, we will assess the probability and record any such compensation costs deemed necessary in accordance with applicable accounting standards.

Equity Incentive Plan

On March 16, 2006, our Parent adopted the Equity Incentive Plan, or the Incentive Plan as amended in December 2009. On December 14, 2012, the Incentive Plan was further amended to increase the number of authorized units issuable under the Incentive Plan to 112,766,083 Units. Generally, so long as the unit holder is employed or remains a member of the board of managers of our Parent, these units vest over time or upon achievement of certain company performance goals. Subject to certain conditions, units are also eligible to vest in the event of an initial public offering, change of control or partial sale. On December 14, 2012, our Parent, in exchange for the forfeiture of previously issued Class B Common Units, issued new Class B Common Units to certain unit holders, which, in each case, are eligible, subject to certain conditions, for distributions from our Parent in the event that certain total enterprise values are met in connection with certain qualifying transactions.

As a result of the modifications to the Incentive Plan on December 14, 2012, or the Modification, as well as adoption of the CIP, we utilized the Monte Carlo simulation pricing model, or the Monte Carlo Analysis, to determine whether additional value was granted to the unit holders upon receipt of the new Units. The Monte Carlo Analysis calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome. The Monte Carlo simulation pricing model simulated a number of different enterprise value paths until an expected liquidation date. The drift term, used to evolve the simulated enterprise value, is the risk-free rate. The liquidation date of each simulation path is determined by the time the simulated enterprise value exceeds $1.2 billion or December 31, 2017, whichever occurs first.

Our Company also utilized the Monte Carlo Analysis for Units granted subsequent to December 13, 2012 and expects to use the Monte Carlo Analysis for future grants. For Units issued prior to December 14, 2012, our Company used the Black-Scholes option pricing model to determine the fair value of the Units granted. For Units granted during the ~~second~~third fiscal quarter of 2013, the weighted average grant date fair value per Unit was $0.2756.

The following weighted average assumptions were used in the Monte Carlo Analysis for Units granted during the ~~second~~third fiscal quarter of 2013:

Risk-free interest rate		0.7	~~1.6~~%	%
Expected volatility(1)		30.0	~~32.0~~%	%

~~(1)~~_________________________________________________________ ~~Expected volatility is based upon a peer group of companies given no historical data for the Units.~~

~~Accordingly,~~(1)Expected ~~our~~volatility ~~Company~~is ~~records~~based ~~compensation~~upon ~~expense using the fair value of the Units granted with time vesting over the vesting service period on~~ a ~~straight-line~~peer ~~basis.~~group ~~Compensation expense for the performance based vesting Units is recognized when it becomes probable that the performance conditions will be met. As~~ of ~~June 29,~~companies ~~2013,~~given weno ~~have~~historical ~~not~~data ~~recognized any compensation expense~~ for the ~~performance based vesting~~ Units ~~as it is not probable that the performance conditions will be met~~.

Accordingly, our Company records compensation expense using the fair value of the Units granted with time vesting over the vesting service period on a straight-line basis. Compensation expense for the performance based vesting Units is recognized when it becomes probable that the performance conditions will be met. As of September 28, 2013, we have not recognized any compensation expense for the performance based vesting Units as it is not probable that the performance conditions will be met.

Our Company recognized the following unit based non-cash compensation expense, included in selling, general and administrative expenses, for its Units during the first three fiscal quarters of 2013 and 2012 as follows:

Fiscal Quarter Ended

Three Fiscal Quarters Ended

September 28,

2013

September 29,

2012

September 28,

2013

September 29,

2012

Equity compensation expense

1,614

630

6,781

1,963

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

~~Our~~As ~~Company~~of ~~recognized~~September 28, ~~the~~2013, ~~following~~there ~~unit~~was ~~based~~$19,049 ~~non-cash~~of unrecognized compensation ~~expense~~costs, ~~included~~net inof ~~selling~~actual and estimated forfeitures related to the Units. This was comprised of $8,114 ~~general~~related ~~and~~to ~~administrative~~time ~~expenses~~based vesting Units and $10,935 ~~for~~related ~~its~~to the performance based vesting Units. ~~during~~The unrecognized cost related to the ~~first~~time ~~two~~based ~~fiscal~~vesting ~~quarters~~Units is expected to be amortized over a weighted average service period of ~~2013~~approximately ~~and~~2 ~~2012~~years. asThe ~~follows:~~unrecognized cost related to the performance based vesting Units will be recognized when it becomes probable that the performance conditions will be met.

	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	June 29, 2013		June 30, 2012		June 29, 2013		June 30, 2012
Equity compensation expense	$	4,739	$	729	$	5,167	$	1,333

As of June 29, 2013, there was $20,499 of unrecognized compensation costs, net of actual and estimated forfeitures related to the Units. This was comprised of $8,754 related to time based vesting Units and $11,745 related to the performance based vesting Units. The unrecognized cost related to the time based vesting Units is expected to be amortized over a weighted average service period of approximately 2 years. The unrecognized cost related to the performance based vesting Units will be recognized when it becomes probable that the performance conditions will be met.

Our Company’s Unit activity under the Incentive Plan is as follows:

	Number of Units
Outstanding at December 29, 2012		108,156,595
Cancelled		(40,648,488	)
Outstanding at March 30, 2013		67,508,107
Granted		41,788,866
Cancelled		(9,487,216	)
Outstanding at June 29, 2013		99,809,757
Vested Units at June 29, 2013		49,020,191
Granted		3,037,320
Outstanding at September 28, 2013		102,847,077
Vested Units at September 28, 2013		50,884,873

13. Warranty Obligations

Our Company records a product warranty obligation at the time of sale based on our historical experience. We estimate our warranty obligation by reference to historical product warranty return rates, material usage and service delivery costs incurred in correcting the product. Should actual product warranty return rates, material usage or service delivery costs differ from the historical rates, revisions to the estimated warranty liability would be required.

The following is a reconciliation of the changes in our Company’s product warranty liability:

	2013			2012
Beginning of period	$	2,889		$	2,240
Warranty costs incurred during the period		(2,279	)		(2,284	)
Warranty expense recorded during the period		2,268			2,440
End of first fiscal quarter		2,878			2,396
Warranty costs incurred during the period		(1,760	)		(1,571	)
Warranty expense recorded during the period		1,856			1,912
End of second fiscal quarter	$	2,974		$	2,737
Warranty costs incurred during the period		(951	)		(1,233	)
Warranty expense recorded during the period		1,042			1,168
End of third fiscal quarter	$	3,065		$	2,672

14. Related Party Transactions

Our Company, certain of our subsidiaries, RBG and our Parent have management agreements with Fenway Partners, LLC and Fenway Partners Resources, Inc., each an affiliate of Fenway Partners Capital Fund II, L.P and Fenway Partners Capital Fund III, L.P., which are affiliates of our Parent, pursuant to which Fenway Partners, LLC and Fenway Partners Resources, Inc. agree to provide management and other advisory services to our Company, certain of our subsidiaries, RBG and our Parent. These management agreements provided for an annual management fee and a fee in connection with certain significant transactions. In connection with the Easton acquisition, the management agreements were amended to remove any obligation to pay an annual management fee, except for advisory services in connection with certain types of transactions and will be paid a fee equal to the greater of $1.0 million or 1.5% of the gross value of such transaction, plus reimbursement of fees and expenses incurred in connection with such transactions. No annual management fees have been paid under the management agreements since 2006.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

In connection with the acquisition of Easton in 2006, Easton and various affiliates of James L. Easton (including Jas. D. Easton, Inc.) entered into various technology license and trademark license agreements with respect to certain intellectual property owned or licensed by Easton, including the Easton brand name. Pursuant to these agreements, Easton has granted each of Jas D. Easton, Inc., James L. Easton Foundation, Easton Development, Inc. and Easton Sports Development Foundation a name license for use of the Easton name solely as part of their respective company names. In addition, Easton has granted each of Easton Technical Products, Inc. and Hoyt Archery, Inc. a license to certain trademarks, including the Easton brand solely in connection with specific products or services, none of which are currently competitive with our Company’s products or services. Easton has also granted each of these entities a license to certain technology solely in connection with specific products and fields. Easton has also entered into a patent license agreement with Easton Technical Products, Inc., which grants it a license to exploit the inventions disclosed in the patent solely within specific fields. Lastly, Easton entered into a trademark license agreement with Easton Technical Products, Inc., which grants Easton a license to use certain trademarks solely in connection with specific products or services.

Our Company has entered into a right of first offer agreement with Jas. D. Easton, Inc. and Easton Technical Products, Inc. pursuant to which our Company is to receive the opportunity to purchase Easton Technical Products, Inc. prior to any third party buyer. The term of the right of first offer agreement extends until the earliest of (1) March 16, 2016, (2) the date Easton Technical Products, Inc. no longer uses the name “Easton,” (3) the effectiveness of any initial public offering by Easton Technical Products, Inc. and (4) the consummation of any sale of such company or a controlling interest therein effectuated in accordance with the terms of the right of first offer agreement.

Affiliates of Jas. D. Easton, Inc. and James L. Easton own certain of the properties currently leased by Easton. Rent expense pursuant to such affiliate leases was $274 and $281 for the ~~second~~third fiscal quarters of 2013 and 2012 respectively. For the first ~~two~~three fiscal quarters of 2013 and 2012, rent expense pursuant to such affiliate leases was $~~549~~823 and $~~561~~842, respectively.

In March 2013, our Company distributed $920 to RBG, which has been recorded as a distribution to RBG in Stockholder’s Equity to enable EB Sports to purchase from former employees, Series A Preferred Shares and vested Class C Units. In May 2013, our Company distributed $8,178 to RBG, to enable EB Sports to pay interest on the New Holdco Facility.

On December 14, 2012, our Company entered into an amended and restated consulting agreement with Terry Lee, a member of our board of directors. On February 13, 2013, Mr. Lee was appointed as Executive Chairman and Chief Executive Officer of our Company to fill the vacancy resulting from the resignation of our former President and Chief Executive Officer, Paul Harrington. On April 19, 2013, our Company entered into an employment agreement with Mr. Lee, pursuant to which the consulting agreement was terminated.

15. Supplemental Guarantor Condensed Financial Information

In December 2009, in connection with the Refinancing, we issued $350,000 of 9.750% Senior Secured Notes due 2016, or the Notes. The indenture governing the Notes contains certain restrictions on us, including restrictions on our ability to incur indebtedness, pay dividends, grant liens, sell assets and engage in certain other activities. The Notes are guaranteed by all of our domestic subsidiaries, or Guarantors. Each subsidiary guarantor is wholly owned and the guarantees are full and unconditional and joint and several. All other subsidiaries of our Company, or Non-Guarantors, do not guarantee the Notes.

The following condensed consolidating financial statements present the results of operations, financial position and cash flows of (1) Issuer, (2) Guarantors, (3) Non-Guarantors and (4) eliminations to arrive at the information for our Company on a consolidated basis at September 28, 2013 and for the third fiscal quarter of 2013, the first three fiscal quarters of 2013 and the respective comparable periods for fiscal 2012. Separate financial statements and other disclosures concerning the Guarantors are not presented because our management does not believe such information is material to investors. Therefore, each of the Guarantors is combined in the presentation below.

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

The following condensed consolidating financial statements present the results of operations, financial position and cash flows of (1) Issuer, (2) Guarantors, (3) Non-Guarantors and (4) eliminations to arrive at the information for our Company on a consolidated basis at June 29, 2013 and for the second fiscal quarter of 2013, the first two fiscal quarters of 2013 and the respective comparable periods for fiscal 2012. Separate financial statements and other disclosures concerning the Guarantors are not presented because our management does not believe such information is material to investors. Therefore, each of the Guarantors is combined in the presentation below.

Condensed Consolidating Balance Sheet

~~June~~September 2928, 2013

	Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	23,~~301~~005	$	10,~~039~~253	$	1923,~~800~~166	$	—		$	3236,~~140~~424
Accounts receivable, net		—		~~206~~179,~~535~~249		2326,~~807~~418		—			~~230~~205,~~342~~667
Inventories, net		—		~~123~~114,~~815~~257		1612,~~443~~780		—			~~140~~127,~~258~~037
Prepaid expenses		1,~~831~~839		42,~~271~~888		1,~~177~~060		—			75,~~279~~787
Deferred taxes		—		20,777		—		—			20,777
Other current assets		—		87,~~603~~668		32,~~108~~927		—			1110,~~711~~595
Total current assets		4,~~132~~844		~~374~~335,~~040~~092		6466,~~335~~351		—			~~442~~406,~~507~~287
Property, plant and equipment, net		3438,~~790~~301		2726,~~184~~562		1,~~762~~993		—			6366,~~736~~856
Deferred financing fees, net		87,~~635~~970		—		—		—			87,~~635~~970
Investments and intercompany receivables		~~378~~362,~~210~~778		6170,~~970~~756		7581,~~545~~249		(~~515~~514,~~725~~783	)		—
Intangible assets, net		—		~~256~~265,~~380~~781		5,~~232~~392		—			~~261~~271,~~612~~173
Goodwill		16,195		186,353		5,191		—			207,739
Other assets		—		1,~~091~~105		~~135~~133		—			1,~~226~~238
Total assets	$	~~441~~430,~~962~~088	$	~~907~~885,~~018~~649	$	~~152~~160,~~200~~309	$	(~~515~~514,~~725~~783	)	$	~~985~~961,~~455~~263
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Revolving credit facility	$	5515,000	$	—	$	—	$	—		$	5515,000
Current portion of capital lease obligations		—		30		—		—			30
Accounts payable		—		5957,~~517~~553		42,~~550~~391		—			6459,~~067~~944
Accrued expenses		1322,~~012~~023		4959,~~671~~091		4,~~342~~394		—			6785,~~025~~508
Total current liabilities		6837,~~012~~023		~~109~~116,~~218~~674		86,~~892~~785		—			~~186~~160,~~122~~482
Long-term debt, less current portion		347,~~522~~676		—		—		—			347,~~522~~676
Capital lease obligations, less current portion		—		8		—		—			8
Deferred taxes		—		62,952		—		—			62,952
Deferred taxes		—		56,352		—		—			56,352
Other noncurrent liabilities		—		14,566		7,433		—			21,999
Other noncurrent liabilities		—		13,976		7,433		—			21,409
Long-term intercompany payables		—		399,404		78,232		(477,636	)		—
Long-term intercompany payables		—		409,021		68,615		(477,636	)		—
Total liabilities		384,699		593,596		92,450		(477,636	)		593,109
Total liabilities		415,534		588,575		84,940		(477,636	)		611,413
Total stockholder’s equity		45,389		292,053		67,859		(37,147	)		368,154
Total stockholder’s equity		26,428		318,443		67,260		(38,089	)		374,042
Total liabilities and stockholder’s equity	$	430,088	$	885,649	$	160,309	$	(514,783	)	$	961,263
Total liabilities and stockholder’s equity	$	441,962	$	907,018	$	152,200	$	(515,725	)	$	985,455

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

Condensed Consolidating Balance Sheet

December 29, 2012

	Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1,664	$	9,244	$	29,944	$	—		$	40,852
Accounts receivable, net		—		204,654		23,547		—			228,201
Inventories, net		—		125,049		16,667		—			141,716
Prepaid expenses		2,955		2,307		900		—			6,162
Deferred taxes		—		20,777		—		—			20,777
Other current assets		—		10,313		2,870		—			13,183
Total current assets		4,619		372,344		73,928		—			450,891
Property, plant and equipment, net		25,006		28,887		1,656		—			55,549
Deferred financing fees, net		9,964		—		—		—			9,964
Investments and intercompany receivables		362,081		82,642		72,307		(517,030	)		—
Intangible assets, net		—		260,580		5,318		—			265,898
Goodwill		16,195		187,311		5,191		—			208,697
Other assets		—		1,100		135		—			1,235
Total assets	$	417,865	$	932,864	$	158,535	$	(517,030	)	$	992,234
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Revolving credit facility	$	35,000	$	—	$	—	$	—		$	35,000
Current portion of capital lease obligations		—		28		—		—			28
Accounts payable		—		74,468		3,876		—			78,344
Accrued expenses		8,350		50,591		4,907		—			63,848
Total current liabilities		43,350		125,087		8,783		—			177,220
Long-term debt, less current portion		347,224		—		—		—			347,224
Capital lease obligations, less current portion		—		24		—		—			24
Deferred taxes		—		62,626		—		—			62,626
Other noncurrent liabilities		—		14,208		7,433		—			21,641
Long-term intercompany payables		—		412,844		64,792		(477,636	)		—
Total liabilities		390,574		614,789		81,008		(477,636	)		608,735
Total stockholder’s equity		27,291		318,075		77,527		(39,394	)		383,499
Total liabilities and stockholder’s equity	$	417,865	$	932,864	$	158,535	$	(517,030	)	$	992,234

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

Condensed Consolidating Statement of Comprehensive (Loss) Income

Fiscal Quarter Ended ~~June~~September 2928, 2013

	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	~~195~~193,~~232~~298		$	1416,~~201~~597		$	(710,~~852~~474	)	$	~~201~~199,~~581~~421
Cost of sales		—			~~124~~125,~~631~~592			1214,~~930~~330			(710,~~852~~474	)		129,~~709~~448
Gross profit		—			7067,~~601~~706			12,~~271~~267			—			7169,~~872~~973
Selling, general and administrative expenses		1510,~~729~~966			4144,~~577~~468			62,~~429~~262			—			6357,~~735~~696
Amortization of intangibles.		—			1,~~815~~816			—			—			1,~~815~~816
(Loss) income from operations		(1510,~~729~~966	)		2721,~~209~~422			(5~~,158~~	)		—			610,~~322~~461
Interest expense, net		10,~~201~~238			~~317~~982			1614			—			1011,~~534~~234
Share of net income (loss) of subsidiaries under equity method		2612,~~015~~518			(~~5,213~~64	)		—			(2012,~~802~~454	)		—
Income (loss) before income taxes		85			21,679			(5,174	)		(20,802	)		(4,212	)
(Loss) income before income taxes		(8,686	)		20,376			(9	)		(12,454	)		(773	)
Income tax (benefit) expense		—			(4,336	)		39			—			(4,297	)
Income tax expense		—			7,858			55			—			7,913
Net income (loss)		85			26,015			(5,213	)		(20,802	)		85
Net (loss) income		(8,686	)		12,518			(64	)		(12,454	)		(8,686	)
Other comprehensive (loss) income:
Foreign currency translation adjustment		—			—			(21,~~025~~184	)		—			(21,~~025~~184	)
Comprehensive income (loss)	$	85		$	26,015		$	(7,238	)	$	(20,802	)	$	(1,940	)
Comprehensive (loss) income	$	(8,686	)	$	12,518		$	1,120		$	(12,454	)	$	(7,502	)

Condensed Consolidating Statement of Comprehensive Income

Fiscal Quarter Ended ~~June~~September 3029, 2012

Issuer

Guarantor Subsidiaries

Non-Guarantor Subsidiaries

Eliminations

Consolidated

Net sales

—

~~208~~199,~~870~~665

2224,~~357~~253

(1710,~~160~~589

)

~~214~~213,~~067~~329

Cost of sales

—

~~138~~130,~~165~~395

1817,~~227~~270

(1710,~~160~~589

)

~~139~~137,~~232~~076

Gross profit

—

7069,~~705~~270

46,~~130~~983

—

7476,~~835~~253

Selling, general and administrative expenses

1012,~~420~~041

4241,~~507~~804

2,~~377~~509

—

5556,~~304~~354

Amortization of intangibles

—

2,597

—

2,597

(Loss) income from operations

(1012,~~420~~041

)

2524,~~601~~869

14,~~753~~474

1617,~~934~~302

Interest expense, net

910,~~824~~221

~~666~~879

1012

—

1011,~~500~~112

Share of net income of subsidiaries under equity method

2325,~~952~~921

13,~~465~~532

—

(2529,~~417~~453

)

—

Income before income taxes

3,~~708~~659

2627,~~400~~522

14,~~743~~462

(2529,~~417~~453

)

6,~~434~~190

Income tax expense

—

21,~~448~~601

~~278~~930

—

2,~~726~~531

Net income

3,~~708~~659

2325,~~952~~921

13,~~465~~532

(2529,~~417~~453

)

3,~~708~~659

Other comprehensive income:

Foreign currency translation adjustment

—

(12,~~323~~593

)

—

(12,~~323~~593

)

Comprehensive income

3,~~708~~659

2325,~~952~~921

~~142~~6,125

(2529,~~417~~453

)

26,~~385~~252

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

Condensed Consolidating Statement of Comprehensive (Loss) Income

Three Fiscal Quarters Ended September 28, 2013

	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	597,115		$	43,387		$	(31,888	)	$	608,614
Cost of sales		—			386,018			39,141			(31,888	)		393,271
Gross profit		—			211,097			4,246			—			215,343
Selling, general and administrative expenses		43,965			130,512			11,135			—			185,612
Amortization of intangibles		—			6,102			—			—			6,102
(Loss) income from operations		(43,965	)		74,483			(6,889	)		—			23,629
Interest expense, net		30,588			1,849			42			—			32,479
Share of net income (loss) of subsidiaries under equity method		63,889			(7,046	)		—			(56,843	)		—
(Loss) income before income taxes		(10,664	)		65,588			(6,931	)		(56,843	)		(8,850	)
Income tax expense		—			1,699			115			—			1,814
Net (loss) income		(10,664	)		63,889			(7,046	)		(56,843	)		(10,664	)
Other comprehensive (loss) income:
Foreign currency translation adjustment		—			—			(2,364	)		—			(2,364	)
Comprehensive (loss) income	$	(10,664	)	$	63,889		$	(9,410	)	$	(56,843	)	$	(13,028	)

Condensed Consolidating Statement of Comprehensive Income

~~Two~~Three Fiscal Quarters Ended ~~June~~September 29, ~~2013~~2012

	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	~~403~~620,~~817~~706		$	2658,~~790~~918		$	(2135,~~414~~947	)	$	~~409~~643,~~193~~677
Cost of sales		—			~~260~~409,~~426~~466			2445,~~811~~896			(2135,~~414~~947	)		~~263~~419,~~823~~415
Gross profit		—			~~143~~211,~~391~~240			113,~~979~~022			—			~~145~~224,~~370~~262
Selling, general and administrative expenses		3234,~~999~~178			86127,~~044~~231			87,~~873~~389			—			~~127~~168,~~916~~798
Amortization of intangibles		—			47,~~286~~791			—			—			47,~~286~~791
(Loss) income from operations		(3234,~~999~~178	)		5376,~~061~~218			(65,~~894~~633	)		—			1347,~~168~~673
Interest expense, net		2030,~~350~~209			~~867~~1,993			2833			—			2132,~~245~~235
Share of net income (loss) of subsidiaries under equity method		51,371			(6,982	)		—			(44,389	)		—
Share of net income of subsidiaries under equity method		73,104			4,376			—			(77,480	)		—
(Loss) income before income taxes		(1,978	)		45,212			(6,922	)		(44,389	)		(8,077	)
Income before income taxes		8,717			78,601			5,600			(77,480	)		15,438
Income tax (benefit) expense		—			(6,159	)		60			—			(6,099	)
Income tax expense		—			5,497			1,224			—			6,721
Net (loss) income		(1,978	)		51,371			(6,982	)		(44,389	)		(1,978	)
Net income		8,717			73,104			4,376			(77,480	)		8,717
Other comprehensive (loss) income:
Other comprehensive income:
Foreign currency translation adjustment		—			—			(31,~~548~~065	)		—			(31,~~548~~065	)
Comprehensive (loss) income	$	(1,978	)	$	51,371		$	(10,530	)	$	(44,389	)	$	(5,526	)
Comprehensive income	$	8,717		$	73,104		$	5,441		$	(77,480	)	$	9,782

Condensed Consolidating Statement of Comprehensive Income

Two Fiscal Quarters Ended June 30, 2012

	Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	421,041	$	34,665		$	(25,358	)	$	430,348
Cost of sales		—			279,071		28,626			(25,358	)		282,339
Gross profit		—			141,970		6,039			—			148,009
Selling, general and administrative expenses		22,137			85,427		4,880			—			112,444
Amortization of intangibles		—			5,194		—			—			5,194
(Loss) income from operations		(22,137	)		51,349		1,159			—			30,371
Interest expense, net		19,988			1,114		21			—			21,123
Share of net income of subsidiaries under equity method		47,183			844		—			(48,027	)		—
Income before income taxes		5,058			51,079		1,138			(48,027	)		9,248
Income tax expense		—			3,896		294			—			4,190
Net income		5,058			47,183		844			(48,027	)		5,058
Other comprehensive income:
Foreign currency translation adjustment		—			—		(1,528	)		—			(1,528	)
Comprehensive income (loss)	$	5,058		$	47,183	$	(684	)	$	(48,027	)	$	3,530

EASTON-BELL SPORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited and amounts in thousands, except as specified)

Condensed Consolidating Statement of Cash Flows

~~Two~~Three Fiscal Quarters Ended ~~June~~September 2928, 2013

	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(110,~~978~~664	)	$	5163,~~371~~889		$	(67,~~982~~046	)	$	(4456,~~389~~843	)	$	(110,~~978~~664	)
Non-cash adjustments		~~676~~47,020			(2975,~~725~~863	)		14,~~226~~635			4456,~~389~~843			1632,~~566~~635
Changes in operating assets and liabilities		514,~~786~~789			~~(16~~27,~~995~~484	)		(~~487~~1,215	)		—			~~(11~~41,~~696~~058	)
Net cash provided by (used in) operating activities		451,~~484~~145			415,~~651~~510			(63,~~243~~626	)		—			263,~~892~~029
Cash flows from investing activities:
Purchases of property, plant and equipment		(1420,~~749~~706	)		(35,~~842~~817	)		(~~455~~865	)		—			(1927,~~046~~388	)
Net cash used in investing activities		(14,749	)		(3,842	)		(455	)		—			(19,046	)
Purchase of intellectual property		—			(8,662	)		—			—			(8,662	)
Net cash used in investing activities		(20,706	)		(14,479	)		(865	)		—			(36,050	)
Cash flows from financing activities:
Payments on capital lease obligations		—			(1422	)		—			—			(1422	)
Proceeds from revolving credit facility, net		20,000			—			—			—			20,000
Payments on revolving credit facility, net		(20,000	)		—			—			—			(20,000	)
Distribution to RBG		(9,098	)		—			—			—			(9,098	)
Net cash provided by (used in) financing activities		10,902			(14	)		—			—			10,888
Net cash used in financing activities		(29,098	)		(22	)		—			—			(29,120	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(32,~~446~~287	)		—			(32,~~446~~287	)
Net change in cash and cash equivalents		~~637~~1,341			~~795~~1,009			(106,~~144~~778	)		—			(84,~~712~~428	)
Cash and cash equivalents, beginning of period		1,664			9,244			29,944			—			40,852
Cash and cash equivalents, end of period	$	23,~~301~~005		$	10,~~039~~253		$	1923,~~800~~166		$	—		$	3236,~~140~~424

Condensed Consolidating Statement of Cash Flows

~~Two~~Three Fiscal Quarters Ended ~~June~~September 3029, 2012

	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	58,~~058~~717		$	4773,~~183~~104		$	~~844~~4,376		$	(4877,~~027~~480	)	$	58,~~058~~717
Non-cash adjustments		(522,~~570~~542	)		(2877,~~699~~590	)		67,~~249~~899			4877,~~027~~480			2030,~~007~~331
Changes in operating assets and liabilities, net of effects from purchase of business		(16,~~845~~222	)		~~(11~~17,~~476~~176	)		(815,~~559~~037	)		—			~~(21~~8,~~880~~361	)
Net cash (used in) provided by operating activities		(2,357	)		7,008			(1,466	)		—			3,185
Net cash provided by (used in) operating activities		37,481			12,690			(2,762	)		—			47,409
Cash flows from investing activities:
Purchase of property, plant and equipment		(68,~~321~~454	)		(47,~~651~~043	)		(~~687~~1,106	)		—			(1116,~~659~~603	)
Purchase of business, net of cash acquired		—			(1,150	)		—			—			(1,150	)
Net cash used in investing activities		(6,321	)		(5,801	)		(687	)		—			(12,809	)
Purchase of intellectual property		—			(2,500	)		—			—			(2,500	)
Net cash used in investing activities		(8,454	)		(10,693	)		(1,106	)		—			(20,253	)
Cash flows from financing activities:
Payments on capital lease obligations		—			(1320	)		—			—			(1320	)
Proceeds from revolving credit facility, net		9,000			—			—			—			9,000
Payments on revolving credit facility, net		(22,000	)		—			—			—			(22,000	)
Net cash provided by (used in) financing activities		9,000			(13	)		—			—			8,987
Net cash used in financing activities		(22,000	)		(20	)		—			—			(22,020	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1,~~256~~141	)		—			(1,~~256~~141	)
Net change in cash and cash equivalents		~~322~~7,027			1,~~194~~977			(32,~~409~~727	)		—			(16,~~893~~277	)
Cash and cash equivalents, beginning of period		2,697			5,813			20,995			—			29,505
Cash and cash equivalents, end of period	$	39,~~019~~724		$	7,~~007~~790		$	1718,~~586~~268		$	—		$	2735,~~612~~782

16. Subsequent Event

On August 2, 2013 our Company acquired an entity which held a license to distribute Bell motorcycle helmets throughout the world (excluding USA, Mexico, and Canada).

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

The following discussion should be read in conjunction with our consolidated financial statements and the related notes, included elsewhere in this Form 10-Q.

Unless otherwise indicated, all references in this Form 10-Q to Easton-Bell, we, us, our, and the Company refer to Easton-Bell Sports, Inc. and its consolidated subsidiaries. References to Easton, Bell and Riddell refer to Easton Sports, Inc. and its consolidated subsidiaries, Bell Sports Corp. and its consolidated subsidiaries and Riddell Sports Group, Inc. and its consolidated subsidiaries, respectively. Easton-Bell Sports, Inc. is a wholly-owned subsidiary of RBG Holdings Corp., or RBG, which, in turn, is a wholly-owned subsidiary of EB Sports Corp., or EB Sports, of which 100% of the issued and outstanding voting common stock is owned by Easton-Bell Sports, LLC, the ultimate parent company, or our Parent.

FORWARD-LOOKING STATEMENTS AND INFORMATION

This quarterly report includes forward-looking statements. All statements other than statements of historical fact included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. The factors mentioned in our discussion in this quarterly report, as well as the risks outlined under “Risk Factors” in our 2012 Annual Report on Form 10-K, will be important in determining future results.

These forward-looking statements are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Investors should not place undue reliance on any of our forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Furthermore, any forward-looking statement speaks only as of the date on which it is made and except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

OVERVIEW

We are a leading designer, developer and marketer of branded sports equipment, protective products and related accessories. We offer products that are used in baseball, softball, ice hockey, football and other team sports, and in various action sports, including cycling, snowsports, powersports and skateboarding. Sports enthusiasts at all levels, from recreational participants to professional athletes, choose our products for their innovative designs and advanced materials, which provide a performance or protective advantage. Throughout our history, our focus on research and development has enabled us to introduce attractive and innovative products, many of which have set new standards for performance in their respective sports. As a result, we are able to consistently enter new product categories and expand and improve our existing product lines.

We currently sell a broad range of products primarily under four well-known brands—Easton^® (baseball, softball and ice hockey equipment, apparel and cycling components), Bell^® (cycling and action sports helmets and accessories and powersports helmets), Giro^® (cycling and snowsports helmets and accessories) and Riddell^® (football equipment and reconditioning services). Together, these brands represent the vast majority of our revenues. We believe that our brands are among the most recognized in the sporting goods industry as demonstrated by our leading market share in many of our core categories.

We sell our products through diverse channels of distribution including: (1) specialty retailers that cater to sports enthusiasts who typically seek premium products at the highest performance levels, (2) national and regional full-line sporting goods retailers and distributors, (3) institutional buyers such as educational institutions and athletic leagues and (4) mass retailers that offer a focused selection of products at entry-level and mid-level price points. As a function of our flexible, low fixed-cost production model, we are able to leverage the expertise of our supplier partners to reduce the overhead and capital intensity generally associated with manufacturing.

We have two reportable segments: Team Sports and Action Sports. Our Team Sports segment primarily consists of football, baseball, softball, ice hockey and other team sports products and reconditioning services related to certain of these products. Our Action Sports segment primarily consists of helmets, equipment, components and accessories for cycling, snowsports and powersports.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures for determining how our business is performing are net sales growth by segment, gross profit margin and selling, general and administrative expenses.

Net Sales

Net sales reflect our revenues from the sale of our products and services less returns, discounts and allowances. It also includes licensing income that we collect. Substantially all of Easton’s activity and all of Riddell’s activity is reflected in our Team Sports segment, which primarily consists of football, baseball, softball, ice hockey and other team sports products and reconditioning services related to certain of these products. All of Bell’s activity, including the Bell brand and the Giro brand and the Easton branded cycling products, are reflected in our Action Sports segment, which primarily consists of helmets, equipment, components and accessories for cycling, snowsports and powersports.

Cost of Sales

Cost of sales includes the direct cost of purchased merchandise, inbound freight, factory operating costs (including depreciation), warranty costs, distribution and shipping expenses, including outbound freight. Cost of sales generally changes as we incur higher or lower costs from our suppliers, experience better or worse productivity in our factories and increase or decrease inventory levels as certain fixed overhead is included in inventory. A shift in the composition of our net sales can also result in higher or lower cost of sales as our gross profit margins differ by product. We review our inventory levels on an ongoing basis to identify slow-moving materials and products and generally reserve for excess and obsolete inventory. If we misjudge the market for our products, we may be faced with significant excess inventory and need to allow for higher charges for excess and obsolete inventory. Such charges have reduced our gross profit in some prior periods and may have a material adverse impact depending on the amount of the charge.

Gross Profit Margin

Gross profit is equal to our net sales minus our cost of sales. Gross profit margin measures gross profit as a percentage of our net sales. We state inventories at the lower of cost (determined on a first-in, first-out basis) or market and include material, labor and factory overhead costs. Our gross profit margin may not be fully comparable to other sporting goods companies, as we include costs related to distribution and freight in cost of sales.

Selling, General and Administrative Expenses

Selling, general and administrative, or SG&A, expenses include all operating expenses not included in cost of sales, primarily, selling, marketing, administrative payroll, research and development, product liability, insurance and non-manufacturing lease expense, as well as certain depreciation and amortization. Other than selling expenses, these expenses generally do not vary proportionally with net sales. As a result, SG&A expenses as a percentage of net sales are usually higher in the winter season than the summer season due to the seasonality of net sales.

Factors Affecting our Business

Outlook

Although other factors will likely impact us, including some we do not foresee, we believe our performance for 2013 may be affected by the following:

Economic Climate. The uncertain worldwide economic environment could cause the reported financial information not to be necessarily indicative of future operating results or of future financial condition. The current economic environment continues to affect our business in a number of direct and indirect ways including: reduced consumer demand for our products; tighter inventory management by retailers; reduced profit margins due to pricing pressures and an unfavorable sales mix due to a higher concentration of sales of mid to lower price point products; changes in currency exchange rates; lack of credit availability, particularly for specialty retailers; inflation; and business disruptions due to difficulties experienced by suppliers and customers.

Retail Market Conditions. The retail market for sports equipment is extremely competitive, with strong pressure from retailers for lower prices. Also, we have experienced the effect of consumers trading down price points and delaying certain discretionary purchases, which has resulted in retailers reluctance to place orders for inventory in advance of selling seasons. Further, institutional customers have reduced or deferred purchases due to budget constraints. These trends may continue to have a negative impact on our businesses. We continue to address the retail environment through our focus on innovation and product development and emphasis on multiple price points.

Operations and Manufacturing. We intend to continue to streamline distribution, logistics and manufacturing operations, bring uniform methodologies to inventory management, optimize transportation, improve manufacturing efficiencies and provide a high level of service to our customers. Over a several year period we have transitioned production of certain products from our facilities to third party suppliers in Asia and other cost efficient sources of labor. However, as a result of our transition of the production of products from our own facilities to third party suppliers, we may become more vulnerable to higher levels of product defects, as well as increased sourced product costs, and our ability to mitigate such cost increases may be reduced.

· Interest Expense and Debt Repayment. In connection with the Refinancing, we entered into a $250.0 million ABL Facility. As of ~~June~~September 2928, 2013, the outstanding principal balance under the ABL Facility was $5515.0 million. In addition, we have $350.0 million of outstanding principal amount of our Notes due in December 2016. Because our existing indebtedness requires that we use a substantial portion of our cash flows to service interest payments, the amount of available cash flows we will have for working capital, capital expenditures, acquisitions and other general corporate purposes could be limited.

Seasonality. Our business is subject to seasonal fluctuation. Sales of cycling products and accessories occur primarily during the warm weather months. Sales of baseball and softball products occur primarily in the late fall and winter months in preparation for the spring baseball and softball season. Sales of football equipment and reconditioning services are driven primarily by football buying patterns, where orders begin at the end of the school football season (December) and run through to the start of the next season (August). Shipments of football products and performance of reconditioning services reach a low point during the football season. Sales of ice hockey equipment are driven by ice hockey buying patterns with orders shipping in late spring for fall play. Seasonal impacts are increasingly mitigated by the increase in snowsports and powersports sales which, to a certain extent, counter the cycling, baseball, softball and football seasons.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon the consolidated financial statements which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, management evaluates estimates, including those related to reserves, intangible assets, income taxes and contingencies. Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition. Sales of products are recognized when title passes and risks of ownership have been transferred to our customer, which usually is upon shipment. Title generally passes to the dealer or distributor upon shipment from our facilities and the risk of loss upon damage, theft or destruction of the product in transit is the responsibility of the dealer, distributor or third party carrier. Reconditioning revenue is recognized upon the completion of services. Allowances for sales returns, discounts and allowances, including volume-based customer incentives, are estimated and recorded concurrent with the recognition of the sale. Royalty income, which is not material, is recorded when earned based upon contract terms with licensees which provide for royalties.

Accounts Receivable and Allowances. We review the financial condition and creditworthiness of potential customers prior to contracting for sales and record accounts receivable at their face value upon completion of the sale to our customers. We record an allowance for doubtful accounts based upon management’s estimate of the amount of uncollectible receivables. This estimate is based upon prior experience including historic losses as well as current economic conditions. The estimates can be affected by changes in the retail industry, customer credit issues and customer bankruptcies. Because we cannot predict future changes in the retail industry and financial stability of our customers, actual future losses from uncollectible accounts may differ from our estimates. If the financial condition of our customers were to deteriorate, resulting in their inability to make payments, a larger allowance might be required. In the event we determine that a smaller or larger allowance is appropriate, we would record a credit or a charge to selling, general and administrative expense in the period in which such a determination is made. Uncollectible receivables are written-off once management has determined that further collection efforts will not be successful. We generally do not require collateral from our customers.

Inventories. Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or market and include material, labor and factory overhead. Provisions for excess and obsolete inventories are based on management’s assessment of slow-moving and obsolete inventory on a product-by-product basis. We record adjustments to our inventory for estimated obsolescence or a decrease in market value equal to the difference between the cost of the inventory and the estimated market value, based on market conditions. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from actual experience if future economic conditions, levels of consumer demand, customer inventory levels or competitive conditions differ from our expectations.

Long-lived and intangible assets. We follow the current accounting guidance relating to goodwill and trademarks, which have indefinite lives and are not amortized. The carrying values of all long-lived assets, excluding goodwill and indefinite lived intangibles, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable (such as a significant decline in sales, earnings or cash flows or material adverse changes in the business climate) in accordance with current accounting guidelines. An impairment loss is recognized when the undiscounted future cash flows estimated to be generated by the asset to be held and used are not sufficient to recover the unamortized balance of the asset. The impairment review includes a comparison of future cash flows expected to be generated by the asset or group of assets with their associated carrying value. If the carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss would be recognized to the extent that the carrying value exceeds the fair value. The estimate of future cash flows is based upon, among other things, certain assumptions about expected future operating performance. These estimates of undiscounted cash flows may differ from actual cash flows due to, among other things, changes in general economic conditions, customer requirements and our business model.

For goodwill, on an annual basis or more frequently if certain conditions exist, the fair values of our reporting units are compared with their carrying values and an impairment loss is recognized if the carrying value exceeds fair value to the extent that the carrying value of goodwill exceeds its fair value. We generally base our measurement of the fair value of a reporting unit on the present value of future discounted cash flows. The discounted cash flows model indicates the fair value of each reporting unit based on the present value of the cash flows that we expect each reporting unit to generate in the future. Our significant estimates in the discounted cash flows model include our discount rate, long-term rate of growth and profitability of each reporting unit and working capital effects. The growth and profitability rates are based on our expectations for the markets in which we operate and cost increases that are reflective of anticipated inflation (deflation) adjusted for any anticipated future cost savings and our discount rate is based on our weighted average cost of capital. In our most recent impairment analysis, we used a weighted average long-term cash flow growth rate of 7.1%, and a discount rate of 9.9%. Our weighted average long-term growth rate reflects our expectation that our future cash flows will increase. The fair value of the reporting units could change significantly due to changes in estimates of future cash flows as a result of changing economic conditions, our business environment and as a result of changes in the discount rate used.

Our Company’s goodwill impairment analysis performed as of December 29, 2012 indicated that none of the reporting units were at risk of failing the goodwill impairment test, and the fair values of each of the reporting units would have to decline at a minimum in excess of 20% depending on the specific reporting unit for the carrying value of a particular reporting unit to exceed the fair value. If reductions in estimated undiscounted or discounted cash flows occur in the future, and such reductions indicate that an impairment loss has occurred, an impairment loss will be recorded in the period that such a determination is made.

We amortize certain definite-lived acquired intangible assets on a straight-line basis over estimated useful lives of seven to nineteen years for patents, four to twenty years for customer relationships, four to nine years for licensing and other agreements and seven years for finite-lived trademarks and tradenames. Deferred financing costs are being amortized by the straight-line method over the term of the related debt, which does not vary significantly from an effective interest method.

Income Taxes. We follow the provisions of Accounting Standards Codification (ASC) Topic 740, “Income Taxes”. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities (excluding non-deductible goodwill) using enacted tax rates in effect for the years in which the differences are expected to become recoverable or payable. A portion of our deferred tax assets relate to net operating loss carryforwards. The realization of these assets is based upon estimates of future taxable income. Changes in economic conditions and the business environment and our assumptions regarding realization of deferred tax assets can have a significant effect on income tax expense.

Product Liability Litigation Matters and Contingencies. We are subject to various product liability claims and/or suits brought against us for claims involving damages for personal injuries or deaths. Allegedly, these injuries or deaths relate to the use by claimants of products manufactured or reconditioned by us or our subsidiaries and, in certain cases, products manufactured by others. The ultimate outcome of these claims, or potential future claims, cannot currently be determined. We estimate the uninsured portion of probable future costs and expenses related to claims, as well as incurred but not reported claims and record an accrual in this amount on our consolidated balance sheets. These accruals are based on managements’ best estimate of probable losses and defense costs anticipated to result from such claims, from within a range of potential outcomes, based on available information, including an analysis provided by an independent actuarial services firm, previous claims history and available information on alleged claims. However, due to the uncertainty involved with estimates, actual results could vary substantially from these estimates.

Derivative Instruments and Hedging Activity. We enter into foreign currency exchange forward contracts to reduce our risk related to inventory purchases. These contracts are not designated as hedges, and therefore, they are recorded at fair value at each balance sheet date, with the resulting change charged or credited to SG&A in the Consolidated Statements of Comprehensive (Loss) Income.

Warranty Liability. We record a warranty obligation at the time of sale based on our historical experience. We estimate our warranty obligation by reference to historical product warranty return rates, material usage and service delivery costs incurred in correcting the product. Should actual product warranty return rates, material usage or service delivery costs differ from the historical rates, revisions to the estimated warranty liability would be required.

Equity-Based Compensation. Effective January 1, 2006, we adopted accounting standards which require us to expense Class B Common Units of our Parent, or Units, granted under our Parent’s Incentive Plan based upon the fair market value of the Units on the date of grant. We are amortizing the fair market value of Units granted over the vesting period of the Units. For Units issued through December 13, 2012, our Company used the Black-Scholes option pricing model to determine the fair value of the Units granted. For Units issued subsequent to December 13, 2012, we utilized the Monte Carlo simulation pricing model, or the Monte Carlo Analysis, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain items included in our Consolidated Statements of Comprehensive (Loss) Income:

	Fiscal Quarter Ended
	June 29, 2013		% of Net Sales			June 30, 2012		% of Net Sales
	September 28, 2013		% of Net Sales			September 29, 2012		% of Net Sales
	(Dollars in millions)
Net sales	$	~~201~~199.64		100.0	%	$	~~214~~213.13		100.0	%
Cost of sales		129.74		64.39	%		~~139~~137.31		6564.03	%
Gross profit		7170.90		35.71	%		7476.82		35.07	%
Selling, general and administrative expenses		6357.87		3128.79	%		5556.3		2526.84	%
Amortization of intangibles		1.8		0.9	%		2.6		1.2	%
Income from operations	$	610.35		35.13	%	$	1617.93		8.01	%
	Two Fiscal Quarters Ended
	June 29, 2013		% of Net Sales			June 30, 2012		% of Net Sales
	(Dollars in millions)
Net sales	$	409.2		100.0	%	$	430.3		100.0	%
Cost of sales		263.8		64.5	%		282.3		65.6	%
Gross profit		145.4		35.5	%		148.0		34.4	%
Selling, general and administrative expenses		127.9		31.3	%		112.4		26.1	%
Amortization of intangibles		4.3		1.0	%		5.2		1.2	%
Income from operations	$	13.2		3.2	%	$	30.4		7.1	%

	Three Fiscal Quarters Ended
	September 28, 2013		% of Net Sales			September 29, 2012		% of Net Sales
	(Dollars in millions)
Net sales	$	608.6		100.0	%	$	643.7		100.0	%
Cost of sales		393.3		64.6	%		419.4		65.2	%
Gross profit		215.3		35.4	%		224.3		34.8	%
Selling, general and administrative expenses		185.6		30.5	%		168.8		26.2	%
Amortization of intangibles		6.1		1.0	%		7.8		1.2	%
Income from operations	$	23.6		3.9	%	$	47.7		7.4	%

Net Sales

The following table sets forth for the periods indicated, net sales for each of our segments:

	Fiscal Quarter Ended										~~Two~~Three Fiscal Quarters Ended
	June 29,		June 30,		Change						June 29,		June 30,		Change
	September 28,		September 29,		Change						September 28,		September 29,		Change
	2013		2012		$			%			2013		2012		$			%
	(Dollars in millions)										(Dollars in millions)
Team Sports	$	~~112~~116.07	$	123.69	$	(117.62	)		(95.48	%)	$	~~236~~352.39	$	~~247~~371.9	$	(1119.60	)		(45.71	%)
Action Sports		8982.67		9089.54		(06.97	)		(17.05	%)		~~172~~255.97		~~182~~271.48		(916.51	)		(5.29	%)
	$	~~201~~199.64	$	~~214~~213.13	$	(1213.59	)		(56.85	%)	$	~~409~~608.26	$	~~430~~643.37	$	(2135.1	)		(45.95	%)

Net sales in Team Sports ~~and Action Sports~~ during the ~~second~~third quarter of 2013 were negatively impacted by foreign currency exchange rate movements of $0.14 million ~~and $0~~.~~2 million, respectively.~~ On a constant currency basis, net sales in Team Sports decreased by $116.58 million or 95.35%~~, and net sales in Action Sports decreased by $0~~.7 ~~million, or 0.7%.~~ Net sales in Team Sports and Action Sports during the first ~~two~~three quarters of 2013 were negatively impacted by foreign currency exchange rate movements of $0.15 million and $0.3 million, respectively. On a constant currency basis, net sales in Team Sports decreased by $1118.54 million or 45.70%, and net sales in Action Sports decreased by $915.29 million, or 5.08%.

28 Team Sports net sales decreased in the third quarter of 2013 when compared to the third quarter of 2012 from lower sales of Easton hockey products (inflated retail inventories, particularly the stick category from multiple manufacturer product launches and loss of market share) and Riddell football helmets due to the prior year benefitting from the impact of the industry’s new ten-year helmet life policy, partially offset by growth in sales of Riddell non-helmet football products and Easton baseball and softball products driven by the introduction of the Mako bat and hockey skates with the introduction of the Mako skate. The decrease in Team Sports net sales for the first three quarters of 2013 when compared to the same period in 2012 reflects the same trends, except for the growth in the performance of reconditioning services.

~~Team~~Action Sports net sales decreased in the ~~second~~third quarter of 2013 when compared to the ~~second~~third quarter of 2012 from lower ~~sales~~cycling ofproduct ~~Easton~~sales ~~hockey~~due ~~products~~to ~~(stick~~inclimate ~~sales~~weather ~~impacted~~earlier byin the ~~timing~~year ofleading ~~stick~~to ~~launches~~excess ~~and inflated~~ retail inventories) and ~~Riddell~~competitive ~~football~~pressure ~~helmets~~in ~~due to~~ the ~~prior~~market ~~year~~and ~~benefitting~~exit ~~from the impact~~ of the ~~industry’s~~low-margin, ~~new ten~~non-~~year~~core ~~helmet~~fitness ~~life~~products ~~policy~~category, partially offset by growth in ~~sales~~Bell ofpowersports ~~Riddell~~helmets ~~non-helmet~~from ~~football~~market ~~products,~~share ~~Easton~~gains ~~baseball~~driven ~~and~~by ~~softball~~product ~~products~~innovation and ~~the~~expanded ~~performance~~geographic ofdistribution, ~~reconditioning~~growth ~~services.~~in ~~The~~Giro ~~decrease~~snow insports ~~Team~~categories ~~Sports~~as ~~net~~the ~~sales~~market ~~for~~rebounds from the ~~first~~ two ~~quarters~~recent ofdismal ~~2013~~weather ~~when~~related ~~compared~~seasons toand ~~the~~growth ~~same~~of ~~period~~juvenile licensed cycling products in ~~2012~~the ~~reflects~~mass channel under the ~~same~~recently ~~trends,~~acquired ~~except~~Disney ~~for~~license. ~~the~~The ~~growth~~decrease in ~~hockey~~Action ~~skates~~Sports ~~during~~net sales for the first ~~two~~three quarters of 2013 ~~driven~~when bycompared to the ~~introduction~~same ofperiod ~~the~~in ~~Easton~~2012 ~~Mako~~reflects ~~skate~~the same trends.

Action Sports net sales decreased in the second quarter of 2013 when compared to the second quarter of 2012 from lower sales of Easton cycling wheels and components and Blackburn accessories, partially offset by growth in sales of Giro cycling helmets in the specialty channel and juvenile licensed products in the mass channel. The decrease in Action Sports net sales for the first two quarters of 2013 when compared to the same period in 2012 reflect the impact of inclement weather earlier in the year on the cycling business. Action Sports net sales for both periods when compared to the prior year reflect growth in sales of Bell powersports helmets from expanded product offerings and geographic distribution and juvenile licensed products in the mass channel and lower sales of Giro snow products related to the timing of pre-season order shipments and exit of the fitness category. 29

Cost of Sales

The following table sets forth for the periods indicated, cost of sales for each of our segments:

	Fiscal Quarter Ended										~~Two~~Three Fiscal Quarters Ended
	June 29, 2013		% of Net Sales			June 30, 2012		% of Net Sales			June 29, 2013		% of Net Sales			June 30, 2012		% of Net Sales
	September 28, 2013		% of Net Sales			September 29, 2012		% of Net Sales			September 28, 2013		% of Net Sales			September 29, 2012		% of Net Sales
	(Dollars in millions)										(Dollars in millions)
Team Sports	$	7071.06		6261.54	%	$	7875.16		6361.20	%	$	~~149~~221.62		6362.37	%	$	~~159~~235.73		6463.43	%
Action Sports		5957.78		6669.69	%		61.25		6768.68	%		~~114~~172.21		6667.03	%		~~122~~184.61		67.27	%
	$	129.74		64.39	%	$	~~139~~137.31		6564.03	%	$	~~263~~393.83		64.56	%	$	~~282~~419.34		65.62	%

For the ~~second~~third quarter of 2013, the increase in Team Sports cost of sales as a percentage of net sales as compared to the same period in 2012 relates to the declines in sales of high-margin Easton hockey sticks and ~~for~~Riddell football helmets, partially offset by increased sales of higher margin Easton bats. For the first ~~two~~three quarters of 2013, the decrease in Team Sports cost of sales as a percentage of net sales as compared to the same ~~periods~~period in 2012 relates to ~~lower labor costs from~~ the continued transition of Riddell football equipment reconditioning operations to Mexico, increased sales of higher -margin Easton bats, introduction of the Easton Mako hockey skate and reduced close-out sales, partially offset by declines in sales of high -margin Easton hockey sticks ~~due to excess retail inventories~~ and Riddell football helmets ~~as the prior year reflects the non-recurring benefit from implementation of the industry’s ten-year helmet life policy~~.

For the ~~second~~third quarter ~~and for the first two quarters~~ of 2013, the ~~decrease~~increase in Action Sports cost of sales as a percentage of net sales as compared to the same ~~periods~~period in 2012 relates to ~~improved~~lower sales ~~mix~~and closeout sales of ~~specialty~~Easton cycling ~~helmets~~wheels and components, which negated the gains from increased sales of higher-margin Bell powersports helmets and Giro snow sports products. For the first three quarters of 2013, the decrease in Action Sports cost of sales as a percentage of net sales as compared to the same period in 2012 relates to increased sales of higher-margin Bell powersports helmets and Giro snow sports products, partially offset by ~~the~~lower ~~decline~~sales in and ~~close-out~~closeout sales of Easton cycling wheels and components.

Gross Profit

The following table sets forth for the periods indicated, gross profit for each of our segments:

	Fiscal Quarter Ended										~~Two~~Three Fiscal Quarters Ended
	June 29, 2013		% of Net Sales			June 30, 2012		% of Net Sales			June 29, 2013		% of Net Sales			June 30, 2012		% of Net Sales
	September 28, 2013		% of Net Sales			September 29, 2012		% of Net Sales			September 28, 2013		% of Net Sales			September 29, 2012		% of Net Sales
	(Dollars in millions)										(Dollars in millions)
Team Sports	$	4245.01		3738.56	%	$	4548.53		3639.80	%	$	86131.78		3637.73	%	$	88136.26		3536.67	%
Action Sports		2924.9		3330.41	%		2927.39		3231.42	%		5883.75		3432.07	%		5987.87		32.83	%
	$	7170.90		35.71	%	$	7476.82		35.07	%	$	~~145~~215.43		35.54	%	$	~~148~~224.03		34.48	%

For the ~~second~~third quarter of 2013, the decrease in Team Sports gross margin as a percentage of net sales as compared to the same period in 2012 relates to the declines in sales of high-margin Easton hockey sticks and ~~for~~Riddell football helmets, partially offset by increased sales of higher margin Easton bats. For the first ~~two~~three quarters of 2013, the increase in Team Sports gross margin as a percentage of net sales as compared to the same ~~periods~~period in 2012 relates to ~~lower labor costs from~~ the continued transition of Riddell football equipment reconditioning operations to Mexico, increased sales of higher -margin Easton bats, introduction of the Easton Mako hockey skate and reduced close-out sales, partially offset by declines in sales of high -margin Easton hockey sticks ~~due to the timing of stick launches~~ and ~~inflated retail inventories and~~ Riddell football helmets ~~as the prior year reflects the non-recurring benefit from implementation of the industry’s ten-year helmet life policy~~.

29 For the third quarter of 2013, the decrease in Action Sports gross margin as a percentage of net sales as compared to the same period in 2012 relates to lower sales and closeout sales of Easton cycling wheels and components, which negated the gains from increased sales of higher-margin Bell powersports helmets and Giro snow sports products. For the first three quarters of 2013, the increase in Action Sports gross margin as a percentage of net sales as compared to the same period in 2012 relates to increased sales of higher-margin Bell powersports helmets and Giro snow sports products, partially offset by lower sales and closeout sales of Easton cycling wheels and components.

For the second quarter and for the first two quarters of 2013, the increase in Action Sports gross margin as a percentage of net sales as compared to the same periods in 2012 relates to improved sales mix of specialty cycling helmets and increased sales of higher margin Bell powersports helmets, partially offset by the decline in and close-out sales of Easton cycling wheels and components. 30

Selling, General and Administrative Expenses

SG&A expenses increased $81.54 million or 152.45% for the ~~second~~third quarter of 2013, as compared to the ~~second~~third quarter of 2012, due primarily to severance expenses related to management changes, increased equity compensation expense related to new grants, ~~the write-off of goodwill~~ and ~~certain other assets and the recording of certain liabilities directly associated with lacrosse, and~~ increased litigation and product liability expenses. SG&A expenses increased $1516.58 million or 1310.80% for the first ~~two~~three quarters of 2013, as compared to the first ~~two~~three quarters of 2012, due primarily to severance expenses related to management changes, increased equity compensation expense related to new grants, increased litigation and product liability expenses and the write-off of goodwill and certain other assets and the recording of certain liabilities directly associated with lacrosse.

Amortization of Intangibles

Amortization of intangibles was $1.8 million for the ~~second~~third quarter of 2013, as compared to $2.6 million for the ~~second~~third quarter of 2012. For the first ~~two~~three quarters of 2013, amortization of intangibles was $46.31 million, as compared to $57.28 million for the first ~~two~~three quarters of 2012. The decrease for both periods is due to certain intangible assets in the Team Sports segment becoming fully amortized in 2013.

Interest Expense

Interest expense for the ~~second~~third quarter and the first ~~two~~three fiscal quarters of 2013 was comparable to the same periods in 2012.

Income Tax Expense

Income tax ~~benefit~~expense was $47.39 million ~~for~~in the ~~second~~third quarter of 2013 as compared to ~~income~~$2.5 ~~tax~~million ~~expense~~in the third quarter of $22012.7 ~~million~~Our Company estimates the annual tax rate using projected earnings for the ~~second~~year, and as a result of the loss before income taxes incurred in the third quarter of ~~2012~~2013, has revised the tax rate for the full-year. ~~The~~ As a result, the effective tax rate was ~~102.0~~greater than 100% for the ~~second~~third quarter of 2013, as compared to 4240.49% for the ~~second~~third quarter of 2012.

Income tax ~~benefit~~expense was $6.1.8 million for the first ~~two~~three quarters of 2013 as compared to ~~income tax expense of~~ $46.27 million for the first ~~two~~three quarters of 2012. The effective tax rate was 75(20.5% ) for the ~~second~~first ~~quarter~~three quarters of 2013, as compared to 4543.35% for the ~~second~~first ~~quarter~~three quarters of 2012. For the ~~second~~third quarter and first ~~two~~three quarters of 2013, the difference between the effective rate and the statutory rate is primarily attributable to the permanent difference for equity compensation expense, foreign income taxes, state income taxes and ~~meals~~changes ~~and~~to ~~entertainment~~the ~~expenses~~valuation allowance. For the ~~second~~third quarter and first ~~two~~three quarters of 2012, the difference between the effective rate and the statutory rate is primarily attributable to the permanent difference for equity compensation expense, state income taxes, meals and entertainment expenses and unrecognized tax benefits.

LIQUIDITY AND CAPITAL RESOURCES

Our financing requirements are subject to variations due to seasonal changes in working capital levels. Internally generated funds are supplemented when necessary from external sources, primarily from the ABL Facility. The cash generated from operating activities, the issuance of the Notes offered on December 3, 2009, and the availability under the ABL Facility are our principal sources of liquidity. Each are described below. Based on our current level of operations and anticipated cost savings and operational improvements, we believe our cash flow from operations, available cash and available borrowings under the ABL Facility will be adequate to meet our liquidity needs for at least the next twelve months. We cannot guarantee that the business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized on schedule or that future borrowings will be available to us under the ABL Facility in an amount sufficient to enable us to repay our indebtedness, including our senior secured notes, or to fund our other liquidity needs. In addition, upon the occurrence of certain events, such as a change of control of our Company, we could be required to repay or refinance our indebtedness. We cannot assure you that we will be able to refinance any of our indebtedness, including the ABL Facility or our Notes, on commercially reasonable terms or at all.

Our ability to make payments to fund working capital, capital expenditures, debt service, strategic acquisitions, joint ventures and investments will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control. Future indebtedness may impose various restrictions and covenants on us which could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities.

Our debt to capitalization ratio, which is total debt divided by the sum of total debt and stockholder’s equity, was 49.8% at September 30 28, 2013, as compared to 49.9% at December 29, 2012. The decrease was primarily attributable to the decrease in the balance outstanding on the revolving credit facility, partially offset by the decrease in shareholder’s equity as a result of the net loss for the first three fiscal quarters of 2013.

~~Our debt to capitalization ratio, which is total debt divided by the sum of total debt and stockholder’s equity, was 52.0% at June~~ 29, 2013, as compared to 49.9% at December 29, 2012. The increase was primarily attributable to the increase in the balance outstanding on the revolving credit facility to fund seasonal working capital requirements and capital expenditures and the decrease in shareholder’s equity as a result of the net loss for the first two fiscal quarters of 2013. 31

From time to time, we review and will continue to review acquisition opportunities as well as changes in the capital markets. If we were to consummate a significant acquisition or elect to take advantage of favorable opportunities in the capital markets, we may supplement availability or revise the terms under the ABL Facility or complete public or private offerings of debt securities. If the capital markets present favorable opportunities to purchase our own debt, we may do so.

9.750% Senior Secured Notes

The ABL Facility

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The ABL Facility requires that if excess gross availability is less than the greater of a specified percentage of the gross borrowing base and a specified dollar amount, we must comply with a minimum fixed charge coverage ratio test. In addition, the ABL Facility includes negative covenants that, subject to significant exceptions, limit our ability and the ability of our subsidiaries, to, among other things (1) incur additional debt, (2) create liens, (3) transfer all or substantially all of our assets or enter into merger or consolidation transactions, (4) change our business, (5) make investments, loans, advances, guarantees and acquisitions, (6) transfer or sell assets, (7) enter into sale and leaseback transactions, (8) enter into swap agreements, (9) make restricted payments, (10) enter into transactions with affiliates and (11) enter into agreements that restrict dividends from subsidiaries.

Holdco Facility Obligations

32 Borrowings under the New Holdco Facility are not guaranteed by us or any of our subsidiaries and are senior unsecured obligations of EB Sports. However, given that EB Sports controls our Company’s direct parent, EB Sports has the ability, subject to the terms of the ABL Facility, the Notes and any other agreements which limit our ability to declare and pay dividends, to obtain money from us and our subsidiaries to fund its obligations under such loan.

Borrowings under the New Holdco Facility are not guaranteed by us or any of our subsidiaries and are senior unsecured obligations of EB Sports. However, given that EB Sports controls our Company’s direct parent, EB Sports has the ability, subject to the terms of the ABL Facility, the Notes and any other agreements which limit our ability to declare and pay dividends, to obtain money from us and our subsidiaries in order to fund its obligations under such loan. 33

At ~~June~~September 2928, 2013, the amount of loans issued under the New Holdco Facility was $~~144~~149,~~958~~093 including accrued interest.

Sources and Uses of Our Cash

Cash provided by operating activities was $263.90 million for the first ~~two~~three quarters of 2013, as compared to $347.24 million in the first ~~two~~three quarters of 2012. The change in cash provided by operating activities between the periods primarily reflects timing of sales and collection of accounts receivable, timing of inventory purchases, ~~and~~ the timing of payments to suppliers, ~~offset~~and bychanges ~~the decrease~~ in ~~income~~equity incompensation ~~2013~~expense ~~and~~which ~~changes~~is ina ~~the~~ non-cash reconciling ~~items~~item, ~~primarily~~offset ~~equity~~by ~~compensation~~the ~~expense~~decrease ~~and~~in ~~deferred~~ income ~~taxes~~in 2013.

We had $~~256~~245.48 million in working capital as of ~~June~~September 2928, 2013, as compared to $273.7 million at December 29, 2012. The $1727.39 million decrease in working capital primarily results from the ~~increase~~decrease in ~~revolver~~accounts ~~borrowings~~receivable and ~~accrued~~inventory ~~expenses,~~ and the ~~decrease~~increase in ~~cash~~accrued expenses, partially offset by the decrease in revolver borrowings and accounts payable.

Cash used in investing activities was $1936.01 million for the first ~~two~~three quarters of 2013, as compared to $1220.83 million in the first ~~two~~three quarters of 2012. The first ~~two~~three quarters of 2013 includes higher purchases of property, plant and equipment primarily related to investments in a new distribution facility as compared to 2012 and the higher purchase of intellectual property of $6.2 million in 2013 as compared to 2012, partially offset by the inclusion of $1.2 million for the purchase of a business in the first ~~two~~three quarters of 2012, while no similar purchase was made in 2013.

Cash ~~provided~~used byin financing activities was $1029.91 million for the first ~~two~~three quarters of 2013, as compared to $922.0 million in the first ~~two~~three quarters of 2012. The first ~~two~~three quarters of 2013 reflect ~~higher net borrowings on the revolving credit facility as compared to 2012, partially offset by~~ a $9.1 million distribution made to RBG, inprimarily ~~2013~~to pay interest on the New Holdco Facility, while no distribution was made in the first ~~two~~three quarters of 2012, partially offset by lower net payments on the revolving credit facility in 2013 as compared to 2012.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk

Our net sales and expenses are predominantly denominated in United States dollars. In fiscal year 2012, approximately 87.3% of our net sales were in United States dollars, with substantially all of the remaining sales in Canadian dollars, British pounds, Euros and Taiwan dollars. In addition, we purchase a number of materials abroad, including finished goods and raw materials from third parties. A significant amount of these purchases were from suppliers in Asia, the majority of which were located in mainland China. We may decide to increase our international sourcing in the future. As a result, we have exposure to currency exchange risks.

Most of what we purchase in Asia are finished goods rather than raw materials. Because we generally purchase these goods in United States dollars, changes in the value of the United States dollar can have a more immediate effect on the cost of our purchases. If we are unable to increase our prices to a level sufficient to cover any increased costs, it could adversely affect our margins.

We enter into foreign currency exchange forward contracts to reduce the risks related to inventory purchases, foreign currency based accounts receivable and operating expenses. At ~~June~~September 2928, 2013, there were foreign currency exchange forward contracts in effect for the purchase of United States $20.15 million aggregated notional amounts, or approximately 20.15 million Canadian Dollars, and the purchase of ~~United States $1~~3.1 5 million Mexican Pesos aggregated notional amounts, or approximately ~~15.0 million~~United ~~Mexican~~States ~~Pesos~~$0.3 million. In the future, if we feel our foreign currency exposure has increased, we may consider entering into additional hedging transactions to help mitigate that risk.

Considering both the anticipated cash flows from firm purchase commitments and anticipated purchases for the next quarter and the foreign currency derivative instruments in place at ~~June~~September 2928, 2013, a hypothetical 10% weakening of the United States dollar relative to other currencies would not have a material adverse effect on our expected ~~third~~fourth quarter 2013 earnings or cash flows. This analysis is dependent on actual purchases during the next quarter occurring within 90% of forecasted amounts. In addition, the effect of the hypothetical change in exchange rates ignores the effect this movement may have on other variables, including competitive risk. If it were possible to quantify this competitive impact, the results could well be different than the sensitivity effects analysis described. In addition, it is unlikely currencies would uniformly strengthen or weaken relative to the United States dollar. In reality, some currencies may weaken while others may strengthen. Moreover, any movement of the United States dollar relative to other currencies and its impact on materials costs would likely be partially offset by the impact on net sales due to our sales internationally and the conversion of those international sales into United States dollars.

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Interest Rate Risk

We are exposed to market risk from changes in interest rates that can affect our operating results and overall financial condition. In connection with our refinancing in December 2009, we entered into a new $250.0 million ABL Facility. As of ~~June~~September 2928, 2013, the outstanding principal balance under this facility was $5515.0 million. The interest rates on the ABL Facility are based on (1) the prime rate or LIBOR in the case of U.S. dollar denominated loans and (2) the prime rate or CDOR in the case of Canadian dollar denominated loans, in each case plus an applicable margin percentage. A hypothetical 10% increase from the average interest rate of 2.47% for the ~~second~~third fiscal quarter of 2013, based on the average ABL Facility balance of $6334.07 million would result in an increase in interest expense of less than $0.1 million for the fiscal quarter ended ~~June~~September 2928, 2013.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of ~~June~~September 2928, 2013, the end of the fiscal period covered by this quarterly report, we performed an evaluation, under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer each concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the period covered by this report that materially affected, or is reasonably likely to affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to various product liability claims and/or suits brought against us for claims involving damages for personal injuries or deaths. Allegedly, these injuries or deaths relate to the use by claimants of products manufactured by us and, in certain cases, products manufactured by others. The ultimate outcome of these claims, or potential future claims, cannot be determined. Our management obtains an actuarial analysis and has established an accrual for probable losses based on this analysis, which considers, among other factors, our previous claims history and available information on alleged claims. However, due to the uncertainty involved with estimates, actual results could vary substantially from those estimates. We maintain primary and excess product liability insurance coverage for such claims under various policies.

We are also involved in various non-product liability claims and actions, including employment related matters as well as claims relating to potential infringement of intellectual property rights of others. We do not believe that any resulting damage awards will have a material adverse effect on our financial results. In 2002, one of our competitors sued us in Canadian Federal Court alleging infringement of a hockey skate patent. The details of such lawsuit have been previously disclosed in prior Company filings. On June 10, 2013, we settled the lawsuit.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 29, 2012. The materialization of any risks and uncertainties identified in Forward-Looking Statements contained in this report together with those previously disclosed in the Form 10-K or those that are presently unforeseen could result in significant adverse effects on our financial condition, results of operations and cash flows. See Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Forward-Looking Statements and Information” in this report.

Item 6. Exhibits

(a)	The following exhibits are filed or incorporated by reference as part of this Form 10-Q. Each management contract or compensation plan required to be filed as an exhibit is identified by an asterisk (*):

Exhibit Number	Description of Exhibit	The filings referenced for incorporation by reference are:
4.1	Amendment No.1 to the Revolving Credit Agreement	Filed herewith
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to the 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		EASTON-BELL SPORTS, INC. Registrant
Dated:	~~August~~November 1312, 2013	/s/ TERRY G. LEE
		Terry G. Lee
		Executive Chairman and Chief Executive Officer (Principal Executive Officer)
Dated:	~~August~~November 1312, 2013	/s/ MARK A. TRIPP
		Mark A. Tripp
		Chief Financial Officer (Principal Financial Officer)

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