<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED SEPTEMBER 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________
TO________________
Commission File Number: 1-13042
RIDE, INC.
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(Exact name of registrant as specified in its charter)
Washington 91-1571027
- ------------------------------ ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8160 304th Avenue Southeast
Preston, Washington 98050
- ------------------------------ ----------------------------
(Address of principal (Zip Code)
executive offices)
(206) 222-6015
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(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 1933 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, without par value -- 10,701,428 shares as of October 31, 1996
<PAGE> 2
INDEX
RIDE, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- September 30, 1996 and
December 31, 1995
Condensed consolidated statements of operations -- Three months and nine
months ended September 30, 1996 and 1995
Condensed consolidated statements of cash flows -- Nine months ended
September 30, 1996 and 1995
Notes to condensed consolidated financial statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RIDE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(Unaudited)
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 737 $14,271
Securities available for sale -- 3,840
Receivables, less allowance for doubtful
accounts of $615 at September 30, 1996 and
$359 at December 31, 1995 28,257 13,556
Inventories (Note 3) 16,302 4,409
Prepaid expenses and other current assets 448 782
Deferred tax assets 281 281
------- -------
Total current assets 46,025 37,139
Plant and equipment, net of accumulated
depreciation 7,276 3,649
Goodwill, net of accumulated amortization 16,396 16,489
Other assets 546 322
------- -------
Total assets $70,243 $57,599
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,761 $ 7,828
Accrued expenses 1,491 2,040
Short-term borrowings 9,221 938
Income taxes payable 1,550 229
Current portion of long-term debt 82 --
------- -------
Total current liabilities 19,105 11,035
Long-term debt, less current portion 558 --
Deferred income taxes 69 69
Shareholders' equity:
Preferred stock 500 500
Common stock 39,217 38,244
Retained earnings 10,794 7,751
------- -------
Total shareholders' equity 50,511 46,495
------- -------
Total liabilities and shareholders' equity $70,243 $57,599
======= =======
</TABLE>
See accompanying notes.
2
<PAGE> 4
RIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
-------------------- --------------------
1996 1995 1996 1995
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Net sales $ 35,329 $31,896 $ 61,606 $49,160
Cost of goods sold 23,985 22,795 42,712 35,983
-------- ------- -------- -------
Gross profit 11,344 9,101 18,894 13,177
Selling, general and administrative expenses 5,419 3,525 14,090 6,953
-------- ------- -------- -------
Operating income 5,925 5,576 4,804 6,224
Interest income 14 114 292 276
Interest expense (125) -- (152) --
-------- ------- -------- -------
Income before income taxes 5,814 5,690 4,944 6,500
Income tax expense 2,172 2,112 1,874 2,417
-------- ------- -------- -------
Net income 3,642 3,578 3,070 4,083
======== ======= ======== =======
Per share:
Primary $ 0.32 $ 0.34 $ 0.27 $ 0.42
Fully diluted $ 0.32 $ 0.33 $ 0.27 $ 0.40
Weighted average common shares
outstanding:
Primary 11,258 10,549 11,334 9,550
Fully diluted 11,485 10,832 11,534 10,159
</TABLE>
See accompanying notes.
3
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RIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Net cash used in operating activities (21,960) ($9,659)
INVESTING ACTIVITIES:
Purchase of furniture, plant and equipment (4,669) (612)
Acquisitions of Thermal Snowboards and
5150 Snowboards, net of cash acquired -- (11,931)
Sale of securities available for sale 3,840 --
Other (448) (33)
-------- -------
Net cash used in investing activities (1,277) (12,576)
FINANCING ACTIVITIES:
Net proceeds from sale of Common Stock 62 23,303
Proceeds from exercise of Common Stock -- 4,515
warrants
Proceeds from exercise of Common Stock 744 87
options
Proceeds from short-term borrowings 13,301 --
Repayments of short-term borrowings (4,080) --
Proceeds from notes payable 640 --
Repayments of notes payable (938) --
Dividends paid (26) (26)
-------- -------
Net cash provided by financing activities 9,703 27,879
-------- -------
Net increase in cash and cash equivalents (13,534) 5,644
Cash and cash equivalents at beginning of period 14,271 5,830
-------- -------
Cash and cash equivalents at end of period $ 737 $11,474
======== =======
SUPPLEMENTAL DISCLOSURE:
Cash paid for income taxes $ 386 $ 887
Cash paid for interest $ 126 $ --
NONCASH FINANCING ACTIVITY:
Preferred stock dividends declared but not paid $ 9 $ 9
Tax benefit of stock option exercises $ 166 $ 66
</TABLE>
See accompanying notes.
4
<PAGE> 6
RIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared by Ride, Inc. (the "Company"), in accordance with generally accepted
accounting principles for interim financial statements and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and disclosures required by generally accepted accounting
principles for complete financial statements. In the opinion of the Company's
management, all adjustments (consisting of normal recurring accruals) necessary
for a fair presentation have been included. The Company's revenues are highly
seasonal, occurring primarily between June and December as its products are
shipped to customers. The results of operations for the three and nine month
periods ended September 30, 1996, therefore may not be indicative of the results
for the full fiscal year. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1995. All amounts are stated
in US dollars.
2. NET INCOME PER SHARE
Primary net income per share for the three and nine month periods ended
September 30, 1996 and 1995 has been computed by dividing net income, after
reduction for Preferred Stock dividends, by the weighted average number of
common shares and equivalents outstanding. Common share equivalents included in
the computation represent shares issuable upon assumed exercise of stock options
and warrants having exercise prices below the average market price of the Common
Stock using the treasury stock method. Fully diluted net income per share has
been computed by dividing net income by the weighted average number of common
shares and equivalents outstanding assuming the conversion of the Preferred
Stock occurred at the beginning of the period. The number of common share
equivalents included in the fully diluted computations represent shares issuable
upon exercise of stock options and warrants having exercise prices below higher
of the ending market price or the average market price of the Common Stock using
the treasury stock method.
3. INVENTORIES
Inventories at September 30, 1996 and December 31, 1995 consisted of the
following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(In thousands)
<S> <C> <C>
Raw materials $ 2,274 $2,812
Work in process 217 98
Finished goods 13,811 1,499
------- ------
16,302 4,409
======= ======
</TABLE>
5
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RIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. FOREIGN CURRENCY TRANSACTIONS
The Company enters into foreign currency forward contracts to hedge firm
purchase and sales orders denominated in foreign currencies. At September 30,
1996, the Company has the following open positions (in thousands):
<TABLE>
<CAPTION>
Foreign Currency Dollar
Foreign Currency Type of Contract Amount Equivalent Maturity Dates
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deutsche Marks Purchase 2,277 $1,521 October 1996
Canadian Dollars Sell 1,700 $1,248 November 1996-January 1997
</TABLE>
The net loss on these forward contracts as of September 30, 1996 of
approximately $28,000 has been deferred and will be recognized when the related
commitments are settled.
5. LONG-TERM DEBT
The Company's landlord has agreed to loan the Company $750,000 to fund a portion
of the expansion and improvement of the Company's Preston, Washington office,
warehouse and manufacturing facilities. The loan has an effective interest rate
of approximately 4.3% and is due in monthly payments of principal and interest
of $9,100 through December 2003. At September 30, 1996, $675,000 of the total
loan amount had been drawn.
6. SUBSEQUENT EVENTS
On October 11, 1996, the Company sold the excess inventory and brokered-OEM
portions of its C.A.S. Sports International, Inc. ("C.A.S. Sports") and C.A.S.
Sports Agency, Inc. ("C.A.S. Agency") subsidiaries to a corporation formed for
that purpose by an investor group that included two former Company executives
and a number of former C.A.S. Sports employees. The aggregate purchase price was
comprised of $700,000 in cash, a short-term, non-interest bearing promissory
note in the amount of $300,000 and two long-term promissory notes aggregating
$2.0 million. The long-term notes are secured by the stock of the sold
corporations and bear interest at prime. No principal or interest payments are
due on the long-term notes for one year from the date of the transaction.
Thereafter, repayment is due in quarterly principal installments of $100,000
plus interest though September 2002. The proceeds of the sale will be used by
the Company to repay current bank borrowings. The Company recognized a pre-tax
gain of approximately $500,000 on the sale.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
To the extent that this Quarterly Report on Form 10-Q discusses financial
projections, information or expectations about the Company's products or
markets, or otherwise makes statements about the future, such statements are
forward looking and are subject to a number of risks and uncertainties that
could cause actual results to differ materially from the statements made. These
factors include the timely availability and acceptance of new products, the
Company's dependence on outside manufacturers, the management of growth and
other risks detailed in the Company's Annual Report on Form 10-K as filed with
the Securities and Exchange Commission for the fiscal year ended December 31,
1995. Forward looking statements contained in this Quarterly Report on Form 10-Q
are more specifically identified with the symbol (*).
GENERAL
The Company is a leading designer, manufacturer and marketer of snowboards and
related products through its subsidiaries, Ride Snowboard Company ("Ride
Snowboards"), C.A.S. Sports International, Inc. and C.A.S. Sports Agency, Inc.
(collectively, "CAS"), Thermal Snowboards, Inc. ("Ride Manufacturing") and SMP
Clothing, Inc. ("SMP"). The Company acquired CAS in August 1994, Thermal in
September 1995 and SMP in October 1995. The Company also acquired 5150
Snowboards, Inc. ("5150") in September 1995 and later merged 5150 with and into
Ride Snowboards. The results of operations of these acquired subsidiaries are
included in the Company's financial statements from their respective dates of
acquisition.
The Company's operations vary significantly during the year based on the winter
sports season. The season for winter sports, which includes snowboarding,
typically runs from November through March in northern hemisphere markets.
Accordingly, the Company generates the majority of its sales in the third and
fourth quarters, as snowboard retailers time their purchases to meet expected
retail demand.* Because relatively lower net sales are generated in the first
and second quarters of the year, the Company expects to incur operating losses
in the first quarter, and possibly in the second quarter, for the foreseeable
future.*
RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 1996 COMPARED WITH QUARTER ENDED SEPTEMBER 30, 1995
Net sales increased 11% to $35.3 million in the third quarter of 1996 from $31.9
million in the third quarter of 1995. Approximately $7.5 million of the 1996
amount was generated by SMP, Ride Manufacturing and the "5150" brand up from
$2.6 million in the third quarter of 1995. Sales in the CAS and Ride Snowboards
divisions (exclusive of sales of the "5150" brand) were down $1.5 million over
the same period in 1995 due primarily to a decline in OEM shipments from the CAS
division.
Gross margins increased to 32% for the third quarter of 1996 from 29% for the
third quarter of 1995. The increase in gross margins in the 1996 period is
attributable primarily to the in-house production of the majority of the
Company's high-end "Ride" and "5150" brand snowboards at Ride Manufacturing.
Margins were also positively affected by the higher gross margins contributed by
SMP and by a smaller percentage of total sales being contributed by the CAS
division, which has relatively lower gross margins.
Selling, general and administrative expenses increased to $5.4 million for the
third quarter of 1996 from $3.5 million for the third quarter of 1995. This
increase was due to the increased scope of the Company's operations in 1996,
including increased research and development expenditures, increased occupancy
expenses associated with the expansion of the Ride Snowboards division
warehouse, office and manufacturing facilities as well as the additional
operating expenses associated with SMP, Ride Manufacturing and the "5150" brand,
which were acquired in the second half of 1995.
7
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Interest income decreased to $14,000 in the third quarter of 1996 compared with
$114,000 for the third quarter of 1995. The decrease was due to overall lower
cash balances on hand during the third quarter 1996 resulting primarily from
seasonably higher cash needs to fund the Company's in-house manufacturing
operations. In addition, the Company had significant cash on hand in the third
quarter of 1995 from the completion of its August 1995 public stock offering.
Interest expense totaled $125,000 in the third quarter of 1996 as the Company
began borrowing under its lines of credit to fund its seasonal working capital
needs and incurred interest expense related to the financing of the Company's
leasehold improvement's at its Preston, Washington facility.
The third quarter 1996 income tax provision of $2.2 million is based upon the
expected overall effective rate for the year.*
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1995
Net sales increased 25% to $61.6 million for the first nine months of 1996 from
$49.2 million in the first nine months of 1995. Approximately $13.6 million of
the 1996 amount was generated by SMP, Ride Manufacturing and the "5150" brand up
from $2.6 million in the first nine months of 1995. Sales in the CAS and Ride
Snowboards divisions (exclusive of sales of the "5150" brand) increased 3% or
$1.4 million over the same period in 1995 reflecting the continued growth across
all of Ride Snowboards' brands offset by a decline in OEM shipments from CAS.
Gross margins increased to 31% for the first nine months of 1996 from 27% for
the first nine months of 1995. The increase in gross margins in the 1996 period
is attributable primarily to the in-house production of the majority of the
Company's high-end "Ride" and "5150" brand snowboards at Ride Manufacturing.
Gross margins were also positively affected by the higher gross margins
contributed by SMP and by a smaller percentage of total sales being contributed
by the CAS division, which has relatively lower gross margins.
Selling, general and administrative expenses increased to $14.1 million for the
first nine months of 1996 from $7.0 million for the same period of 1995. This
increase was due to the increased scope of the Company's operations in 1996,
including increased marketing expenses in the first quarter associated with the
major industry trade shows and new product introductions, increased research and
development expenditures, increased occupancy expenses associated with the
expansion of the Ride Snowboards division warehouse, office and manufacturing
facilities as well as the additional operating expenses associated with SMP,
Ride Manufacturing and the "5150" brand, which were acquired in the second half
of 1995.
Interest income increased to $292,000 for the first nine months of 1996 compared
with $276,000 for the first nine months of 1995. The increase was due to overall
higher cash balances on hand in the first half of 1996 stemming from the
increased scope of the business as well as capital supplied by the Company's
August 1995 public stock offering. Interest expense totaled $152,000 for the
first nine months of 1996 as the Company began borrowing under its lines of
credit to fund its seasonal working capital needs and incurred interest expense
related to the financing of the Company's leasehold improvement's at its
Preston, Washington facility.
The income tax provision of $1.9 million for the first nine months of 1996 is
based upon the expected overall effective rate for the year.*
LIQUIDITY AND CAPITAL RESOURCES
During the first nine months of 1996, the Company used net cash of $22.0 million
in operating activities compared to $9.7 million for the same period in 1995.
The primary uses of cash in operating activities are seasonal buildups in
accounts receivable from third quarter shipments and inventories. A significant
amount of the Company's sales have extended terms which come due in the fourth
quarter which contributed to the receivable buildup. Inventories totaled $16.3
million at September 30, 1996 compared to $4.3 million as of September 30, 1995.
The increase is attributable to several factors including: (a) higher raw
materials and work in process inventories from the increased scope of the
Company's manufacturing operations; (b) additional inventories from the
Company's SMP subsidiary which was purchased in the fourth quarter of 1995; (c)
earlier product deliveries from suppliers in
8
<PAGE> 10
1996, and; (d) late reductions in orders from the Company's primary Japanese
distributor for which inventory commitments had already been made with
suppliers. The Company expects to sell a significant portion of the inventory on
hand through shipping its remaining backlog of orders in the fourth quarter,
through normal reorder activity and through close-out sales if necessary.*
Net cash used in investing activities totaled $1.3 million during the first nine
months of 1996 compared to net cash used in investing activities of $12.6
million in the first nine months of 1995. The 1996 period includes capital
expenditures of approximately $4.7 million offset by approximately $3.8 million
in proceeds from the sale of short term investments. The 1996 capital
expenditures include molds and tooling for snowboards and snowboard bindings,
leasehold improvements related to the expansion of the Company's Preston,
Washington office, warehouse and manufacturing operations, and additional
manufacturing equipment. The 1995 period included $11.9 million for the
purchases of Thermal Snowboards and 5150.
Net cash provided by financing activities totaled $9.7 million in the first nine
months of 1996 compared with $27.9 million in the comparable period of 1995.
Financing activities in the 1996 period include net borrowings of approximately
$9.2 million on the Company's credit facilities, the retirement of $0.9 million
in notes payable to the sellers of SMP, and $0.8 million in proceeds from the
exercise of stock options and sale of common stock through the Company's
employee stock purchase plan. In addition, the Company's landlord has agreed to
loan the Company $750,000 to fund a portion of the expansion and improvement of
the Company's Preston, Washington office, warehouse and manufacturing
facilities. The loan has an annual effective interest rate of approximately 4.3%
and is due in monthly payments of principal and interest through December 2003.
At September 30, 1996, $675,000 of the total loan amount had been drawn. The
1995 period included $23.3 million in proceeds from the sale of common stock and
$4.5 million in proceeds from the exercise of common stock warrants.
The Company has credit facilities with two banks, one in the U.S. and one in
Canada. The U.S. facility provides $30 million in borrowings either for direct
advances or for letters of credit for all of the Company's U.S. subsidiaries.
Borrowings under this facility bear interest at the bank's prime U.S. lending
rate or at a LIBOR option plus 1.5%. The facility expires March 31, 1997 and
contains various financial covenants including working capital, tangible net
worth and quick ratio requirements. The facility is collateralized by
substantially all of the U.S.-based assets of the Company. At September 30,
1996, the Company had outstanding letters of credit aggregating $1.7 million
under this facility and direct advances totaling $6.1 million.
The Canadian bank provides three facilities for the Company's Canadian
operations. The first facility provides a $5.3 million line of credit for direct
borrowings and usance letters of credit. The second facility provides for a
$10.5 million line for no control and sight letters of credit. The third
facility provides for a $1.1 million foreign exchange forward contract line.
Borrowings under these facilities bear interest at the bank's prime U.S. lending
rate plus 0.5%. The credit facilities contain certain operating covenants
including tangible net worth and ownership requirements for CAS and are
collateralized by substantially all of CAS's assets. At September 30, 1996, the
Company had outstanding import letters of credit aggregating $2.0 million and
direct advances totaling $3.1 million. In connection with the October 1996 sale
of the CAS excess inventory and OEM businesses, the Company is in the process of
renegotiating its Canadian bank credit facilities.
The Company believes that cash on hand, collection of receivables and borrowings
under its existing credit facilities will be sufficient to meet its operating
needs for the next 12 months.*
Certain of the Company's purchase commitments and sales are denominated in
foreign currencies. Because a change in the value of such currencies relative to
the U.S. dollar will affect the Company's gross profit and net income, the
Company enters into forward currency contracts to hedge against adverse currency
fluctuations. Although the Company believes that these contracts decrease the
overall exposure to gains and losses from currency fluctuations, such exposure
cannot be entirely eliminated.
Although the Company cannot accurately anticipate the effects of inflation, the
Company does not believe inflation has had or is likely to have a material
effect on its results of operations or liquidity.*
9
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On April 2, 1996, the Company's Preston Binding Company subsidiary
("Preston"), together with Mark A. Raines and Gregory A. Deeney, commenced
an action in the United States District Court for the Southern District of
New York (docket no. 96-CIV-2361-JFK) against Switch Manufacturing Co.
("Switch") for patent infringement. Preston, Raines and Deeney allege that
Switch's Autolock(TM) step-in snowboard binding infringes U.S. Patent No.
4,973,073 (the "Raines Patent") for a step-in binding held by Raines and
Deeney. Preston is a plaintiff in the case because Preston has signed a
letter agreement with Raines and Deeney to acquire the Raines Patent. In
response, Switch commenced an action on April 15, 1996 against Preston and
the Company in the United States District Court for the Northern District
of California (docket No. 96-CIV-1376-WHO) seeking a declaratory judgment
that the Autolock(TM) binding does not infringe the Raines Patent. On July
24, 1996, the judge in the action in the Southern District of New York
granted Switch's motion to transfer the case to the Northern District of
California. The two cases have been consolidated and preliminary discovery
is underway.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
3.1 Restated Articles of Incorporation and Certificate of
Designation of Relative Rights and Preferences of the
Series A 7% Cumulative Nonvoting Preferred Stock (1)
3.2 Bylaws of the Company (1)
3.3 Articles of Amendment to Articles of Incorporation (11)
3.4 Articles of Amendment to Articles of Incorporation (12)
3.5 Articles of Correction (14)
4.1 Article VI of the Articles of Incorporation regarding
Shareholder Rights (See Exhibit 3.1) (1)
4.2 Article VIII of the Articles of Incorporation
regarding Voting Rights (See
10
<PAGE> 12
Exhibit 3.1) (1)
4.4 Specimen Stock Certificate (2)
10.10 Exclusive Distributorship Agreement dated December 7, 1992,
by and between Ride Snowboard Company and Far East
Trading Co., Ltd. (4)
10.23 Exclusive Patent, Trademark and Know-How Licensing Agreement
dated September 29, 1993 by and between Ride Snowboard
Company, Jacob Blattner and David Hubatch (3)
10.25 Employment Agreement, dated August 18, 1994, by and
between Ride Snowboard Company and James J. Salter (5)
10.26 Form of Employment Agreement between Ride Snowboard Company
and Roger B. Madison, Jr. (1)
10.27 Employment Agreement, dated January 1, 1995, by and
between Ride Snowboard Company and Timothy G. Pogue (9)
10.28 Form of Ride Snowboard Company 1994 Stock Option Plan
(1)
10.29 Form of Ride Snowboard Company 1994 Directors'
Nonqualified Stock Option Plan (1)
10.30 Lease Agreement with Teachers Insurance & Annuity Association
dated January 10, 1994 (1)
10.32 Amended Form of Underwriting Agreement (6)
10.34 Standard Form Multiple Occupancy Lease, dated November
29, 1994, by and between Ride Snowboard Company and
BDC Preston Properties One Limited Partnership (8)
10.35 Business Loan Agreement, dated June 10, 1996, by and
between Ride, Inc. and U.S. Bank of Washington, N.A.,
expiring March 31, 1997
10.36 Stock Purchase Agreement, dated August 18, 1994,
between Ride Snowboard Company and James J. Salter,
the James Salter Family Trust, Kenneth Finkelstein
Family Trust, The Snow Trust, Robert Marcovitch, Kerry
Wasserman, Rick Clarfield, Howard Cohen, Gary Kell,
Sandra Pelegrin, Alan Langer, Dan Opyc, C.A.S. Sports
International, Inc. and C.A.S. Sports Agency, Inc. (10)
10.37 Retail Section Lease, dated January 14, 1994, by and
between Dufferin Business Centre Inc. and C.A.S.
Sports International, Inc. (8)
10.38 Retail Section Lease, dated January 11, 1995, by and
between Dufferin Business Centre Inc. and C.A.S.
Sports International, Inc. (8)
10.39 Lease Agreement, dated September 21, 1994, by and
between Westlake-Village Green Associates and C.A.S.
Sports International, Inc. (8)
10.40 Letter agreement for commitment of credit facilities,
dated April 5, 1995, by and between Hongkong Bank of
Canada and C.A.S. Sports International, Inc. (9)
10.41 Agreement, dated January 14, 1994, by and between
C.A.S. Sports International, Inc. and Limited
Snowboards, Inc. (8)
10.42 Agreement, dated March 17, 1994, by and between C.A.S.
Sports International, Inc. and NXT Distribution (8)
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10.43 Agreement, dated March 30, 1994, by and between C.A.S.
Sports International, Inc. and Staple Snowboards Inc.
(8)
10.44 Sublease dated March 23, 1995, by and between Ride
Snowboard Company and E. Kent Halvorson, Inc. (9)
10.45 Ride Snowboard Company 1995 Employee Stock Purchase
Plan (11)
10.46 Ride Snowboard Company 1995 Foreign Subsidiary
Employee Stock Purchase Plan (11)
10.47* Exclusive OEM Agreement, dated July 26, 1995, by and
between Ride Snowboard Company and Straight Line Water
Sports, Inc. (13)
10.48 Employment Agreement, dated September 1, 1995, between
the Company and David A. Janes, Jr. (15)
10.49 Employment Agreement, dated September 1, 1995, between
the Company and Bernard Gervasoni (15)
10.50 Employment Agreement, dated October 19, 1995, between
the Company and David Milo Myers (16)
10.51 Registration Rights Agreement dated October 19, 1995,
between the Company and David Milo Myers, Lawrence
Kraus and Michael Wise (16)
10.52 Stock Purchase Agreement, dated September 1, 1995,
between the Company and the shareholders and option
holders of 5150 Snowboards, Inc. and Thermal
Snowboards, Inc. (17)
10.53 Asset Purchase Agreement, dated October 19, 1995,
among the Company, Sex Money Power Clothing, Inc.,
David Milo Myers, Lawrence Kraus and Michael Wise (18)
10.54 Form of Underwriting Agreement by and between the
Company and Hambrecht & Quist LLC and Dain Bosworth
Incorporated (19)
10.55* Amendment No.1 to Exclusive Distributorship Agreement,
dated October 24, 1995, by and between Ride Snowboard
Company, 5150 Snowboards, Inc., SMP Clothing, Inc. and
Far East Trading Company Ltd. (20)
10.56 Employment Agreement, dated October 14, 1995, by and
between the Company and Kenneth J. Finkelstein (21)
10.57 Employment Agreement, dated January 1, 1996, by and
between C.A.S. Sports International, Inc. and Robert
F. Marcovitch (21)
10.58 First Amendment, dated August 4, 1995, to Lease
Agreement by and between Ride Snowboard Company and
BDC Preston Properties One Limited Partnership (21)
10.59 Second Amendment, dated November 21, 1995, to Lease
Agreement by and between Ride Snowboard Company and
BDC Preston Properties One Limited Partnership (21)
10.60 Third Amendment, dated March 26, 1996, to Lease
Agreement by and between Ride Snowboard Company and
BDC Preston Properties One Limited Partnership (21)
10.61 Amendment No. 2 to Exclusive Distributorship
Agreement, dated October 24, 1995, by and between Ride
Snowboard Company, 5150 Snowboards, Inc., SMP
Clothing, Inc. and Far East Trading Company Ltd.
12
<PAGE> 14
10.62 Letter agreement for commitment of credit facilities,
dated April 30, 1996, by and between Hongkong Bank of
Canada and C.A.S. Sports International, Inc. (22)
10.63 Agreement, dated May 7, 1996, by and between Ride,
Inc. and James J. Salter (23)
10.64 Agreement, dated August 2, 1996, by and between Ride,
Inc. and Kenneth J. Finkelstein (23)
10.65 Agreement, dated August 7, 1996, by and between Ride,
Inc. and Robert E. Hall (23)
10.66 Stock Purchase Agreement, dated October 11, 1996, by
and between Ride, Inc. and Gen-X Equipment, Inc. (24)
10.67 Amendment No. 1 to Resignation Agreement, dated
October 11, 1996, by and between Ride, Inc. and James
J. Salter. (24)
10.68 Amendment No. 1 to Resignation Agreement, dated
October 11, 1996, by and between Ride, Inc. and
Kenneth J. Finkelstein. (24)
11.1 Computation of earnings per share
27.1 Financial Data Schedule
- ------------------------------------
(1) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Registration Statement on Form SB-2, file no. 33-75770-LA.
(2) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Amendment No. 1 to Registration Statement on Form SB-2, file
no. 33-75770-LA.
(3) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Amendment No. 1 to Registration Statement on Form SB-2, file
no. 33-75770-LA, with confidential portions omitted and filed separately
with the Commission pursuant to a Request of Confidential Treatment under
Rule 406 of the Securities Act of 1933.
(4) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Registration Statement on Form SB-2, file no. 33-75770-LA,
with confidential portions omitted and filed separately with the
Commission pursuant to a Request of Confidential Treatment under Rule 406
of the Securities Act of 1933.
(5) Exhibit is incorporated by reference to Exhibit No. 10.1 to the Company's
Current Report on Form 8-K, dated August 31, 1994.
(6) Exhibit is incorporated by reference to Exhibit No. 1.1A to the Company's
Amendment No. 1 to Registration Statement on Form SB-2, file no.
33-75770-LA.
(7) Exhibit is incorporated by reference to Exhibit No. 1.2A to the Company's
Amendment No. 1 to Registration Statement on Form SB-2, file no.
33-75770-LA.
(8) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
13
<PAGE> 15
(9) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Post-Effective Amendment No. 1 to the Registration Statement
on Form SB-2, file no. 33-75770-LA.
(10) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Post-Effective Amendment No. 2 to the Registration Statement
on Form SB-2, file no. 33-75770-LA.
(11) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Registration Statement on Form S-1, file no. 33-94814.
(12) Exhibit is incorporated by reference to an identically numbered exhibit to
Amendment No. 1 to the Company's Registration Statement on Form S-1, file
no. 33-94814.
(13) Exhibit is incorporated by reference to an identically numbered exhibit to
Amendment No. 1 to the Company's Registration Statement on Form S-1, file
no. 33-94814, with confidential portions omitted and filed separately with
the Commission pursuant to a Request of Confidential Treatment under Rule
406 of the Securities Act of 1933.
(14) Exhibit is incorporated by reference to an identically numbered exhibit to
Amendment No. 2 to the Company's Registration Statement on Form S-1, file
no. 33-94814.
(15) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Current Report on Form 8-K, dated September 1, 1995.
(16) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Current Report on Form 8-K, dated October 20, 1995.
(17) Exhibit is incorporated by reference to Exhibit No. 2.1 to the Company's
Current Report on Form 8-K, dated September 1, 1995.
(18) Exhibit is incorporated by reference to Exhibit No. 2.2 to the Company's
Current Report on Form 8-K, dated October 20, 1995.
(19) Exhibit is incorporated by reference to Exhibit No. 1.1 to the Company's
Registration Statement on Form S-1, file no. 33-94814.
(20) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Quarterly Report on Form 10-Q, for the fiscal quarter ended
September 30, 1995.
(21) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
(22) Exhibit is incorporated by reference to an identically numbered
exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996.
(23) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1996.
(24) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Current Report on Form 8-K, dated October 11, 1996.
* Certain portions of this exhibit have been omitted and filed separately
with the Commission pursuant to an Application for Confidential Treatment.
14
<PAGE> 16
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter ended September 30,
1996.
15
<PAGE> 17
EXHIBIT INDEX
Manual
Exhibit No. Description Page No.
- ----------- ----------- --------
11.1 Computation of earnings per share
27.1 Financial Data Schedule
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RIDE, INC.
------------------------------
(Registrant)
Dated: November 13, 1996 By /s/ G. Scott Stewart
------------------------------------
G. Scott Stewart
Sr. Vice President & Chief Financial Officer
16
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------ ------------------------
1996 1995 1996 1995
------------------------ ------------------------
<S> <C> <C> <C> <C>
Primary:
Weighted average common shares 10,640 9,360 10,573 8,328
outstanding
Net effect of dilutive stock
equivalents based on the treasury
stock method using average market price 618 1,189 761 1,222
------------------------ ------------------------
Total weighted average shares 11,258 10,549 11,334 9,550
outstanding
======================== ========================
Net income $ 3,642 $ 3,578 $ 3,070 $ 4,083
Less dividends on preferred stock (9) (9) (26) (26)
------------------------ ------------------------
Adjusted net income $ 3,633 $ 3,569 $ 3,044 $ 4,057
======================== ========================
Net income per share $ 0.32 $ 0.34 $ 0.27 $ 0.42
======================== ========================
Fully diluted:
Weighted average common shares outstanding 10,640 9,360 10,573 8,328
Net effect of dilutive stock equivalents based on
the treasury stock method using ending
market price 645 1,272 761 1,631
Assumed conversion of preferred stock 200 200 200 200
------------------------ ------------------------
Total weighted average shares outstanding 11,485 10,832 11,534 10,159
======================== ========================
Net income $ 3,642 $ 3,578 $ 3,070 $ 4,083
======================== ========================
Net income per share $ 0.32 $ 0.33 $ 0.27 $ 0.40
======================== ========================
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000917734
<NAME> RIDE, INC.
<MULTIPLIER> 1000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 737
<SECURITIES> 0
<RECEIVABLES> 28,257
<ALLOWANCES> 615
<INVENTORY> 16,302
<CURRENT-ASSETS> 46,025
<PP&E> 8,845
<DEPRECIATION> 1,569
<TOTAL-ASSETS> 70,243
<CURRENT-LIABILITIES> 19,105
<BONDS> 0
0
500
<COMMON> 39,217
<OTHER-SE> 10,794
<TOTAL-LIABILITY-AND-EQUITY> 50,511
<SALES> 61,606
<TOTAL-REVENUES> 61,606
<CGS> 42,712
<TOTAL-COSTS> 42,712
<OTHER-EXPENSES> 14,090
<LOSS-PROVISION> 354
<INTEREST-EXPENSE> (140)
<INCOME-PRETAX> 4,944
<INCOME-TAX> 1,874
<INCOME-CONTINUING> 3,070
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,070
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27
</TABLE>
